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Investor preferences for positive social externalities and state-owned enterprises’ facilitated access to capital
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Olschewski, Sebastian, Jakob, Lukas and Schmidt, Ulrich (2023) Investor preferences for positive social externalities and state-owned enterprises’ facilitated access to capital. Journal of Economic Psychology, 94 . 102575. doi:10.1016/j.joep.2022.102575 ISSN 0167-4870.
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WRAP-Investor-preferences-for-positive-social-externalities-and-state-owned-enterprises-facilitated-access-to-capital-Olschewski-2023.pdf - Published Version - Requires a PDF viewer. Available under License Creative Commons Attribution 4.0. Download (693Kb) | Preview |
Official URL: https://doi.org/10.1016/j.joep.2022.102575
Abstract
State-ownership of commercial companies exists around the world, and it is important to understand its effect on financing and investment decisions. Empirically, firms that are partially state-owned (SOE) usually profit from easier access to capital. We propose a novel explanation for this: investors’ social preferences can affect capital allocation if SOEs are perceived as socially beneficial. In support of this we found that people attribute social benefits more to SOEs than to private firms, and their propensity to invest depends on this attitude. Further, in an incentivized modified stochastic public goods game, participants invested in risky options with positive externalities even when the aggregate of private return and externality was lower than the return of an investment option with only private returns. For the case of the EU, we discuss alternative explanations such as state guarantees and political lending in the light of regulations of state aid. We conclude that even if these regulations prohibit direct or indirect state aid for SOEs, state-ownership can affect capital allocation through investors’ social preferences.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance |
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Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
SWORD Depositor: | Library Publications Router | ||||||||
Library of Congress Subject Headings (LCSH): | Government business enterprises, Government corporations, Public goods -- Econometric models, Externalities (Economics), Capital investments -- Decision making, Capital | ||||||||
Journal or Publication Title: | Journal of Economic Psychology | ||||||||
Publisher: | Elsevier BV | ||||||||
ISSN: | 0167-4870 | ||||||||
Official Date: | January 2023 | ||||||||
Dates: |
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Volume: | 94 | ||||||||
Number of Pages: | 11 | ||||||||
Article Number: | 102575 | ||||||||
DOI: | 10.1016/j.joep.2022.102575 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Date of first compliant deposit: | 14 February 2023 | ||||||||
Date of first compliant Open Access: | 15 February 2023 |
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