Reluctant Regulation

Bernardo Bortolotti, Carlo Cambini and Laura Rondi

MPRA Paper from University Library of Munich, Germany

Abstract: We study the effect of state ownership on the market-to-book ratios of publicly traded European utilities observed from 1994 to 2005. We find that when the company is subject to independent regulation, state ownership is positively associated with firm value. This effect is strong and significant in countries where weak checks and balances and political fragmentation do not constrain the power of the executive. We conclude that where political institutions are weak, politicians imperfectly delegate powers to regulatory agencies in order to benefit state-owned firms.

Keywords: Privatization; Regulatory Independence; Political Institutions; Firm Value (search for similar items in EconPapers)
JEL-codes: G32 K23 L33 L51 L90 (search for similar items in EconPapers)
Date: 2012-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Reluctant regulation (2013)
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