Government intervention and firm investment : evidence from international micro-data

Chen LIN; Sonia Man-lai WONG

doi:10.1016/j.jimonfin.2012.06.002

Government intervention and firm investment : evidence from international micro-data

Chen LIN, Sonia Man-lai WONG

Lingnan University

Research output: Journal Publications › Journal Article (refereed) › peer-review

26 Citations (Scopus)

Abstract

Building on the important study by Beck et al. (2005), we examine how government intervention in firms' decision-making is related to their investment and sales growth. Using the unique World Bank dataset (WBES) covering 6500 firms in 70 countries, we find strong evidence that the extent of government intervention in firms' investment, employment, sales, pricing, dividend, and merger and acquisition decisions is negatively related to their investment and sales growth, with the effect being more profound in foreign owned firms and less significant in state-owned firms. The empirical results are robust to a series of robustness tests and instrumental variable regressions.

Original language	English
Pages (from-to)	637-653
Number of pages	17
Journal	Journal of International Money and Finance
Volume	32
Early online date	22 Jun 2012
DOIs	https://doi.org/10.1016/j.jimonfin.2012.06.002
Publication status	Published - Feb 2013

Bibliographical note

The authors gratefully acknowledge financial support from the HKSAR Government (GRF 147810) and Chinese University of Hong Kong.

Keywords

Firm investment
Government intervention
International evidence

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10.1016/j.jimonfin.2012.06.002

Cite this

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title = "Government intervention and firm investment : evidence from international micro-data",

abstract = "Building on the important study by Beck et al. (2005), we examine how government intervention in firms' decision-making is related to their investment and sales growth. Using the unique World Bank dataset (WBES) covering 6500 firms in 70 countries, we find strong evidence that the extent of government intervention in firms' investment, employment, sales, pricing, dividend, and merger and acquisition decisions is negatively related to their investment and sales growth, with the effect being more profound in foreign owned firms and less significant in state-owned firms. The empirical results are robust to a series of robustness tests and instrumental variable regressions.",

keywords = "Firm investment, Government intervention, International evidence",

author = "Chen LIN and WONG, {Sonia Man-lai}",

note = "The authors gratefully acknowledge financial support from the HKSAR Government (GRF 147810) and Chinese University of Hong Kong.",

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T1 - Government intervention and firm investment : evidence from international micro-data

AU - LIN, Chen

AU - WONG, Sonia Man-lai

N1 - The authors gratefully acknowledge financial support from the HKSAR Government (GRF 147810) and Chinese University of Hong Kong.

PY - 2013/2

Y1 - 2013/2

N2 - Building on the important study by Beck et al. (2005), we examine how government intervention in firms' decision-making is related to their investment and sales growth. Using the unique World Bank dataset (WBES) covering 6500 firms in 70 countries, we find strong evidence that the extent of government intervention in firms' investment, employment, sales, pricing, dividend, and merger and acquisition decisions is negatively related to their investment and sales growth, with the effect being more profound in foreign owned firms and less significant in state-owned firms. The empirical results are robust to a series of robustness tests and instrumental variable regressions.

AB - Building on the important study by Beck et al. (2005), we examine how government intervention in firms' decision-making is related to their investment and sales growth. Using the unique World Bank dataset (WBES) covering 6500 firms in 70 countries, we find strong evidence that the extent of government intervention in firms' investment, employment, sales, pricing, dividend, and merger and acquisition decisions is negatively related to their investment and sales growth, with the effect being more profound in foreign owned firms and less significant in state-owned firms. The empirical results are robust to a series of robustness tests and instrumental variable regressions.

KW - Firm investment

KW - Government intervention

KW - International evidence

UR - http://commons.ln.edu.hk/sw_master/517

UR - http://www.scopus.com/inward/record.url?scp=84874767915&partnerID=8YFLogxK

U2 - 10.1016/j.jimonfin.2012.06.002

DO - 10.1016/j.jimonfin.2012.06.002

M3 - Journal Article (refereed)

SN - 0261-5606

VL - 32

SP - 637

EP - 653

JO - Journal of International Money and Finance

JF - Journal of International Money and Finance

ER -

Government intervention and firm investment : evidence from international micro-data

Abstract

Bibliographical note

Keywords

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