Private Benefits of State Ownership: The Role of Media and National Culture

Abstract

This study contributes to a better understanding of private benefits that may be extracted when the state is a firm’s major shareholder. The private benefits of state ownership are the political, social, or personal advantages that controlling politicians may be able to extract from the state-owned enterprise (SOE). We predict that institution-level factors (such as the effectiveness of the nation’s media and the characteristics of the nation’s culture) may affect the size of the private benefits of ownership for different SOEs. Consistent with our hypothesis, we identify that media and national culture significantly affect the private benefits of state ownership.