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Article: Corporate ownership structure and the choice between bank debt and public debt
Title | Corporate ownership structure and the choice between bank debt and public debt |
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Authors | |
Keywords | Ownership structure Excess control rights Bank Debt Public Debt |
Issue Date | 2013 |
Publisher | Elsevier. The Journal's web site is located at http://www.sciencedirect.com/science/journal/0304405X |
Citation | Journal of Financial Economics, 2013, v. 109 n. 2, p. 517-534 How to Cite? |
Abstract | This article examines the relation between a borrowing firm's ownership structure and its choice of debt source using a novel data set on corporate ownership, control, and debt structures for 9,831 firms in 20 countries from 2001 to 2010. We find that the divergence between the control rights and cash-flow rights of a borrowing firm's largest ultimate owner has a significant negative impact on the firm's reliance on bank debt financing. In addition, we show that the control-ownership divergence affects other aspects of debt structure including debt maturity and security. Our results indicate that firms controlled by large shareholders with excess control rights may choose public debt financing over bank debt as a way of avoiding scrutiny and insulating themselves from bank monitoring. |
Persistent Identifier | http://hdl.handle.net/10722/192346 |
ISSN | 2023 Impact Factor: 10.4 2023 SCImago Journal Rankings: 13.655 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Lin, C | en_US |
dc.contributor.author | Ma, Y | en_US |
dc.contributor.author | Malatesta, P | en_US |
dc.contributor.author | Xuan, Y | en_US |
dc.date.accessioned | 2013-10-24T01:50:06Z | - |
dc.date.available | 2013-10-24T01:50:06Z | - |
dc.date.issued | 2013 | en_US |
dc.identifier.citation | Journal of Financial Economics, 2013, v. 109 n. 2, p. 517-534 | en_US |
dc.identifier.issn | 0304-405X | en_US |
dc.identifier.uri | http://hdl.handle.net/10722/192346 | - |
dc.description.abstract | This article examines the relation between a borrowing firm's ownership structure and its choice of debt source using a novel data set on corporate ownership, control, and debt structures for 9,831 firms in 20 countries from 2001 to 2010. We find that the divergence between the control rights and cash-flow rights of a borrowing firm's largest ultimate owner has a significant negative impact on the firm's reliance on bank debt financing. In addition, we show that the control-ownership divergence affects other aspects of debt structure including debt maturity and security. Our results indicate that firms controlled by large shareholders with excess control rights may choose public debt financing over bank debt as a way of avoiding scrutiny and insulating themselves from bank monitoring. | - |
dc.language | eng | en_US |
dc.publisher | Elsevier. The Journal's web site is located at http://www.sciencedirect.com/science/journal/0304405X | - |
dc.relation.ispartof | Journal of Financial Economics | en_US |
dc.rights | This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. | - |
dc.rights | NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Financial Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in PUBLICATION, [VOL 109, ISSUE 2, (2013)] DOI 10.1016/j.jfineco.2013.03.006 | - |
dc.subject | Ownership structure | - |
dc.subject | Excess control rights | - |
dc.subject | Bank Debt | - |
dc.subject | Public Debt | - |
dc.title | Corporate ownership structure and the choice between bank debt and public debt | en_US |
dc.type | Article | en_US |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1016/j.jfineco.2013.03.006 | en_US |
dc.identifier.scopus | eid_2-s2.0-84878979206 | en_US |
dc.identifier.hkuros | 239454 | - |
dc.identifier.volume | 109 | en_US |
dc.identifier.issue | 2 | en_US |
dc.identifier.spage | 517 | en_US |
dc.identifier.epage | 534 | en_US |
dc.identifier.isi | WOS:000321029000011 | - |
dc.identifier.issnl | 0304-405X | - |