Author: Boubakri, Narjess; Chen, Ruiyuan Ryan; El Ghoul, Sadok; Guedhami, Omrane; Nash, Robert
Title: State ownership and stock liquidity: Evidence from privatization Cord-id: 9cwsbjaw Document date: 2020_10_22
ID: 9cwsbjaw
Snippet: We provide unique firm-level evidence of the relation between state ownership and stock liquidity. Using a broad sample of newly privatized firms (NPFs) from 53 countries over the period 1994–2014, our study identifies a non-monotonic association between state ownership and stock liquidity. The inverse U-shaped relation is consistent with trade-offs between costs and benefits of state ownership and suggests an optimal level of government shareholdings that maximizes stock liquidity of NPFs. We
Document: We provide unique firm-level evidence of the relation between state ownership and stock liquidity. Using a broad sample of newly privatized firms (NPFs) from 53 countries over the period 1994–2014, our study identifies a non-monotonic association between state ownership and stock liquidity. The inverse U-shaped relation is consistent with trade-offs between costs and benefits of state ownership and suggests an optimal level of government shareholdings that maximizes stock liquidity of NPFs. We further identify that the inflection point from the cost/benefit trade-off is contingent upon characteristics of the nation's institutional environment.
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