The Impact of Goverment Ownership on Cost of Debt

Student: Markova Olga

Faculty: International College of Economics and Finance

Educational Programme: Double degree programme in Economics of the NRU HSE and the University of London (Bachelor)

Year of Graduation: 2016

The main objective of this paper is to identify the relationship between cost of debt of Russian companies and state ownership of shares in such companies. The problem is relevant for the Russian market as debt financing plays a very important role in any company’s business and therefore it is crucial for corporations to determine the factors that affect the cost of borrowing as a part of assessing how to lower company’s expenses and increase the profitability. In addition to assessing the relationship with government ownership, this paper also focuses on other factors affecting the cost of debt, including Gross Regional Product and GDP growth, as well as on relationship between indebtedness of the company and state ownership of shares.

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