Abstract
This study connects the development view and political view of government ownership with the firm life cycle theory to explain firms’ investment efficiency. We find that government ownership of firms in the introduction and decline stages is driven by the development view that improves investment efficiency. However, consistent with the political view, higher government ownership worsens firms' investment efficiency in the growth and mature stages. For firms in these two stages, we also find a significant threshold effect of government ownership on investment efficiency. Our results imply that the government's participation objective is different based on the firms’ development stages.
| Original language | English |
|---|---|
| Article number | 103034 |
| Number of pages | 16 |
| Journal | Finance Research Letters |
| Volume | 48 |
| DOIs | |
| Publication status | Published - Aug 2022 |
| Externally published | Yes |
Keywords
- Development view
- Firm life cycle
- Government ownership
- Investment efficiency
- Political view
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