Answer:
Nationalization and its consequences have attracted new interest in the recent financial crisis. We study the
effects of nationalization on company performance using a sample of Russian firms. The Russian government has
increased its role as an owner in several sectors of the economy in the 2000’s. We have assembled a comprehensive
data set of nationalization transactions in Russia for the period from 2004 to 2008. Operating performance is
measured relative to a close match of a non-nationalized firm that is found using propensity score matching. Overall,
the empirical results show no significant effect of the fact of nationalization on performance. There is however, an
increase in leverage over the first two years after nationalization. Subsequent research will shed more light on the
changes in corporate governance going along with nationalization that can have intermediating effects on
performance. Step-by-step explanation: