Politics, State Ownership, and Corporate Investments

• 成果类型: Article
• 署名作者: Alok, Shashwat; Ayyagari, Meghana
• 署名单位: Indian School of Business (ISB); George Washington University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz102
• 发表日期: 2020
• 页码: 3031
• 关键词: government-owned banks; NEWLY PRIVATIZED FIRMS; operating performance; budget cycles; MARKET; ECONOMY; POLICY; connections; incentives; interests

摘要

We document apolitical cycle in the investment decisions of state-owned enterprises (SOEs) by using the constitutionally mandated election schedule in India as a source of exogenous variation in politicians' incentive to cater to voters. Using a project-level investment database, we find that SOEs announce more capital expenditure projects in election years, especially in infrastructure, and in districts with close elections, high-ranking politicians, and left-wing incumbents. SOE projects in election years have negative announcement returns, suggesting a loss in shareholder value. These patterns are not seen in nongovernment firms or in off-election years.