Economics at your fingertips  

Responding to Financial Crisis: The Rise of State Ownership and Implications for Firm Performance

Richard W. Carney, Liu, Wai-Man (Raymond) and Phong Ngo

MPRA Paper from University Library of Munich, Germany

Abstract: We examine changes to corporate ownership in nine East Asian countries following the 1997 Asian Financial Crisis. Countries with lower incomes and in which policy making involves greater transactions costs (i.e., veto points) have more firms with state ownership. Partial state ownership appears to be effective insurance against crisis. Firms with minority state ownership exhibit 5% (annualized) lower idiosyncratic volatility in the quarter of the Lehman Brothers collapse than firms with either no or dominant state ownership. Minority state-owned firms also enjoy a higher abnormal return of 3.7% and 6.1% in the two quarters following the collapse of Lehman Brothers.

Keywords: financial crisis; government ownership; veto players; insurance; corporate performance (search for similar items in EconPapers)
JEL-codes: H11 G38 G34 G10 (search for similar items in EconPapers)
Date: 2012-10-26
New Economics Papers: this item is included in nep-bec, nep-hme and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

Page updated 2021-03-28
Handle: RePEc:pra:mprapa:43600