The impact of SWF ownership on firm performance in pre- and post-COVID-19

Abstract

This study investigates the impact of sovereign wealth fund (SWF) ownership on firm performance during stable periods and the COVID-19 crisis. Employing a quantitative methodology, a global sample of 1,360 non-financial firms over the period 2018 to 2022 is analysed using difference-in-differences and high-dimensional fixed effects regressions. Active SWFs, such as New Zealand’s Super Fund, are compared with passive SWFs, like Norway’s Government Pension Fund Global. We find that that SWF ownership generally stabilises firms but active ownership significantly improves profitability and market valuation, whereas passive ownership provides limited benefits. These effects hold across both periods of stability and crisis. The findings support stewardship theory for active SWFs and align with agency theory for passive SWFs. The study underscores that active engagement is key to enhancing long-term firm resilience and value.