State or Private ownership - The impact on performance and dividend payout

Abstract

This paper explores the impact state and private ownership have on return on assets and dividend payouts on a large sample of private and public limited liability companies in Norway. We test the impact using random-effects models on data for the time period 2002-2015. Our results are consistent with theory, which suggests that state ownership offers lower profitability and dividend payouts. We find that state-owned enterprises offer an average return on assets of 4.3192% while private-owned enterprises offer an average return on assets of 8.4738%. State-owned enterprises yield an average dividend payout ratio of 10.8798% while privately owned enterprises yield 24.4069%. By controlling for other factors, we find that state ownership negatively impacts return on assets and dividend payouts.