Disinvestment, lending relationships and executive compensation: Evidence from the Indian experience

Ghosh, Saibal (2010): Disinvestment, lending relationships and executive compensation: Evidence from the Indian experience. Published in: Global Business Review , Vol. 12, No. 2 (June 2011): pp. 213-235.

Abstract

The analysis employs data on federal Government-owned public enterprises (PSEs) since the 1980s that encompasses the partial privatization program to examine the likelihood of privatization. The results indicate that employment-intensive, high-paying but less profitable firms are more likely to be privatized. In terms of lending relationships, the analysis indicates that private banks are the main bank for small firms and foreign banks are the main bank for large, established firms. State-owned banks are more likely to be associated with leveraged PSEs as compared to other bank groups. In terms of compensation policies in PSEs, the evidence testifies that bigger, established and leveraged PSE firms pay higher salaries.

• Item Type: MPRA Paper
• Language: English
• Keywords: Partial privatization; public enterprises; relationship lending; executive compensation; India
• Subjects: L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J33 - Compensation Packages ; Payment Methods

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