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http://hdl.handle.net/10419/53932
  
Title:Complex ownership and capital structure PDF Logo
Authors:Paligorova, Teodora
Xu, Zhaoxia
Issue Date:2009
Series/Report no.:Bank of Canada Working Paper 2009,12
Abstract:This paper investigates the impact of pyramid ownership structure and multiple controlling shareholders on firm leverage. Pyramids, having at least one controlling shareholder and a subsidiary, rely significantly more on debt financing than non-pyramid firms. Moreover, higher leverage is observed in pyramids where the second controlling shareholders have more voting rights. We also find that the disparity between the voting rights of the first two controlling shareholders is negatively related to firm leverage. Interestingly, the influence of the second controlling shareholder is only present in non-family controlled pyramids. Overall, the results are consistent with the view that controlling shareholders in pyramids use debt to secure their private benefits.
Subjects:Financial markets
International topics
JEL:G31
G32
Document Type:Working Paper
Appears in Collections:Bank of Canada Working Papers

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