The Effect of Government Ownership on Financial Structure: A Case Study of Sahamedalat in Iran

Please enable javascript in your browser.

Jafari, Mohammad Mahdi | 2022

234 Viewed

Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 55571 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Mahmoodzadeh, Amineh
Abstract:
The distinction between SOEs and private firms in access to loans is essential from the viewpoint of policy-making. This distinction is more crucial when we know that the difference is caused by factors other than natural market forces and has emerged merely by government ownership. In this paper, we investigate a unique intervention in privatization and identify the causal effect of government ownership on access to loans. In this respect, we study Sahamedalat in Iran by using DID approach and estimate the effect of giving up the treatment firm's cashflow right on the amount and composition of the loans. The results show the intervention significantly decreases the long-term loan of the treatment firms. However, the total amount of loans won't change, meaning the treatment firms managed to replace it with short-term loans. Also, the financial expenses of the treatment group increased significantly. The findings show that the treatment firms' probability of receiving loans from private banks increases. Thus, we can conclude that there is strong evidence of preferential lending among the SOEs
Keywords:
Government Ownership ; Bank Loan ; Sahamedalat ; Financial Expenses ; Preferential Lending ; State Owned Enterprises ; Financial Structure