Are state stocks better than private stocks?: A research in the Greek stock market

Abstract

A great number of large Greek firms are partially state-owned. In fact, the publicly traded (in ASE market) public ones account for almost half of the overall market capitalization, differentiating Greece from other economically developed countries. The purpose of this paper is those firms’ stocks performance assessment (through stock market returns), relative to the “private” stocks’. The outcome is the –fairly small- public superiority, a behavior persistent even when adjusting for market, size, book-to-market and momentum factors. The justification behind this performance can be established by the fundamentals resolution and through behavioral finance issues leading the investors towards the public firms’ preference.