Ownership Changes and Access to External Financing
Working Paper #185
This paper examines access to external financing in the privatization context and provides new evidence on the effects of financing constraints on performance and investment. Ownership reforms increase firms’ reliance on external financing. Empirically, performance and investment changes around ownership reforms are increasing in country-level measures of access to credit. The presence of a severe prior public financing constraint contributes to stronger investment growth after privatization. Privatized enterprises do not outperform publicly owned industries, all else given. Our analyses rely on new international sector- and firm-level data and correct for potential endogeneity of ownership changes.
About the Authors
Joseph Stiglitz
President
Initiative for Policy Dialogue (IPD)
Joseph E. Stiglitz is President of the Initiative for Policy Dialogue, and Chairman of the Committee on Global Thought at Columbia University. He is University Professor at Columbia, teaching in its Economics Department, its Business School, and its School of International and Public Affairs. He chaired the UN Commission of Experts on Reforms of the International Monetary and Financial System, created in the aftermath of the financial crisis by the President of the General Assembly. He is former Chief Economist and Senior Vice-President of the World Bank and Chairman of President Clinton’s Council of Economic Advisors. He was awarded the Nobel Memorial Prize in Economics in 2001.
Anzhela Knyazeva
Assistant Professor of Finance
University of Rochester, Simon Graduate School of Business Administration
Diana Knyazeva
Assistant Professor of Finance
University of Rochester, Simon Graduate School of Business Administration
Publication Information
| Type | Working Paper |
| Program | Financial Markets Reform |
| Posted | 12/27/08 |
| Download | 211kb pdf |
| # Pages | 37 |