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The Effects of Ownership Structure on Corporate Financing Decisions: Evidence from Stock Market Liberalization
Author(s) -
O'Connor Thomas,
Flavin Thomas
Publication year - 2013
Publication title -
international review of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.489
H-Index - 18
eISSN - 1468-2443
pISSN - 1369-412X
DOI - 10.1111/irfi.12014
Subject(s) - capital structure , corporate governance , liberalization , stock market , business , maturity (psychological) , monetary economics , corporate finance , financial system , debt , economics , finance , market economy , paleontology , developmental psychology , psychology , horse , biology
We analyze the impact of firm‐specific stock market liberalization events on the capital structure and debt maturity decisions of firms from emerging market economies. We differentiate between firms based on their ownership structures at the time of liberalization and analyze their post‐liberalization behavior regarding corporate financing decisions. Our empirical results show that single–class‐share firms (typically with stronger corporate governance and better information environments) respond differently to their dual–class‐share counterparts. Liberalization results in lower debt reliance for the former group while the latter lengthen the maturity of their debt portfolios. Jel Classification: F30; G15; G32.