State Ownership and Corporate Leverage Around the World

Ralph De Haas, Sergei Guriev and Alexander Stepanov

No 17300, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Does state ownership hinder or help firms access credit? We use data on almost 4 million firms in 89 countries to study the relationship between state ownership and corporate leverage. Controlling for country-sector-year fixed effects and conventional firm-level determinants of leverage, we show that state ownership is robustly and negatively related to corporate leverage. This relationship holds across most of the firm-size distribution - with the important exception of the largest companies - and is stronger in countries with weak political and legal institutions. A panel data analysis of privatized firms and a comparison of privatized with matched control firms yield similar qualitative and quantitative effects of state ownership on leverage.

Keywords: State ownership; Privatization; Corporate debt; State banks (search for similar items in EconPapers)
JEL-codes: D22 F36 G32 G38 H11 H81 L33 (search for similar items in EconPapers)
Date: 2022-05
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Working Paper: State Ownership and Corporate Leverage Around the World (2022)
Working Paper: State Ownership and Corporate Leverage Around the World (2022)
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