Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197426 
Year of Publication: 
2016
Citation: 
[Journal:] e-Finanse: Financial Internet Quarterly [ISSN:] 1734-039X [Volume:] 12 [Issue:] 1 [Publisher:] University of Information Technology and Management [Place:] Rzeszów [Year:] 2016 [Pages:] 57-67
Publisher: 
University of Information Technology and Management, Rzeszów
Abstract: 
Existing literature has not yet defined a clear-cut relationship between ownership structure and capital structure. This study aims to contribute to this controversial argument by examining the impact of internal (managerial) ownership and external ownership on financing preferences using the case of non-financial firms listed on Karachi stock exchange during the period of 2008-2012. Our results suggest that the external ownership has a significant effect on capital structure in accordance with the presence of blockholders. In contrast, the internal ownership has a complicated effect; it shows significant positive and negative relationship to leverage at lower and certain higher proportion of managerial shareholding respectively. Besides, the combined analyses suggest that the presence of blockholders negates the impact of managerial ownership on capital structure. This implies that the presence of large and dominant shareholders in Pakistani firms may have caused a bias for debt financing to protect their voting power and returns.
Subjects: 
capital structure
ownership structure
shareholders
Pakistan
JEL: 
G32
C51
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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