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You are suffocating me: Firm-level analysis of state-owned enterprises and private investment

Serhan Cevik ()

Journal of Comparative Economics, 2020, vol. 48, issue 2, 292-301

Abstract: Literature on whether government spending crowds out or crowds in the private sector is large, but still without an unambiguous conclusion. Using firm-level data from Ukraine, this paper provides a granular empirical investigation to disentangle the impact of state-owned enterprises (SOEs) on private firm investment in Ukraine—a large transition economy. Controlling for firm characteristics and systematic differences across sectors, the results indicate that the SOE concentration in a given sector has a statistically significant negative effect on private fixed capital formation, and that the impact of SOEs is stronger in those industries in which SOEs have a more dominant presence. These findings imply that private firms operating in sectors with a high level of SOE concentration invest systematically less than businesses that are not competing directly with SOEs.

Keywords: Fixed investment; State-owned enterprises; Crowding-out; Firm-level analysis; Ukraine (search for similar items in EconPapers)
JEL-codes: E22 E51 E60 H32 H50 L10 L25 L32 L33 (search for similar items in EconPapers)
Date: 2020
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Working Paper: You Are Suffocating Me! Firm-Level Evidence on Crowding Out (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:48:y:2020:i:2:p:292-301

DOI: 10.1016/j.jce.2019.12.004

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