Year: 2011
Type: article
Abstract: ABSTRACT This paper provides theory and empirical evidence supporting a complementary perspective on capital structure based on corporate ownership structure. According to our ownership view, capital structure is partly determined by the incentives and the goals of those who are in control of the firm. Our results strongly support this view. As a consequence of managerial entrenchment and rent expropriation phenomena, self‐interested agents (entrenched managers and controlling owners) chose the capital structure most appropriate for their own best interest. Additionally, we find evidence of an interaction effect between managerial ownership and ownership concentration, in particular, the larger debt increments promoted by outside owners when managers are entrenched.
Source: International Review of Finance
Authors: JULIO PINDADO, CHABELA DE LA TORRE
Institution: Universidad de Salamanca
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W1508630432