Government Ownership, Informed Trading, and Private Information

We investigate the nature and extent of information asymmetry among traders in companies with government ownership. Consistent with greater exposure and public scrutiny, we find relatively less informed trading related to the skilled analysis of public information in the shares of firms with government presence, resulting in lower overall information asymmetry. At the same time, we also find that firms with government presence have a significantly higher proportion of information asymmetry arising from explicitly private information, consistent with the literature on the self-serving influence of government stakeholders not necessarily committed to maximizing firm value