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The Impact of Ownership on Companies’ Investment Rates in Ukraine

Mykhayliv, Dariya
; 
Zauner, K.G.
Publication Date
2016
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Keywords
Investment, Ownership, Corporate governance, Investment rates, Ukraine, Financial constraints, Soft budget constraints, Private benefits of control
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© 2016 The Authors. Reproduced by permission from the copyright holder.
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Abstract
In this paper, we empirically analyze the impact of ownership groups on companies’ investment rates in Ukraine using a new dynamic Tobin’s Q model allowing investment rates to depend on present and lagged Q. We find that the presence of a majority in and increases in state, non-domestic and financial companies’ ownership has a significantly negative impact on investment rates. State and insider ownership are associated with soft budget constraints whereas non-domestic, financial companies’ and financial and industrial groups’ ownership with hard budget constraints. The dynamic model shows persistence in the market-to-book value of equity, the proxy for Q.
URI
http://hdl.handle.net/10454/11241
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Accepted manuscript
Citation
Mykhayliv D and Zauner KG (2016) The Impact of Ownership on Companies' Investment Rates in Ukraine. Working Paper. The Authors.
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