Discussion paper

DP17300 State Ownership and Corporate Leverage Around the World

Does state ownership hinder or help firms access credit? We use data on almost 4 million firms in 89 countries to study the relationship between state ownership and corporate leverage. Controlling for country-sector-year fixed effects and conventional firm-level determinants of leverage, we show that state ownership is robustly and negatively related to corporate leverage. This relationship holds across most of the firm-size distribution - with the important exception of the largest companies - and is stronger in countries with weak political and legal institutions. A panel data analysis of privatized firms and a comparison of privatized with matched control firms yield similar qualitative and quantitative effects of state ownership on leverage.


De Haas, R, S Guriev and A Stepanov (2022), ‘DP17300 State Ownership and Corporate Leverage Around the World‘, CEPR Discussion Paper No. 17300. CEPR Press, Paris & London. https://cepr.org/publications/dp17300