Global value chain and firms’ leverage: The mediator role of foreign ownership

Jingyi Gao

Finance Research Letters, 2022, vol. 48, issue C

Abstract: This paper investigates the effect of participation in the global value chain on leverage dynamics by using novel matched Chinese firm data and the moderating role of foreign ownership. This paper shows firms with higher upstream may reduce leverage degree, and foreign firms’ leverage reduces more. In addition, the effects show heterogeneity among areas and industries. We test the mechanism by adopting foreign ownership entry shock and the value-added ratio. The policy implication is straightforward the climbing of the global value chain and foreign ownership attraction can maintain the leverage risk for developing countries.

Keywords: Upstream; Leverage; Foreign ownership; Heterogeneity; Value-added ratio (search for similar items in EconPapers)
JEL-codes: D21 F14 F23 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612322001234
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001234

DOI: 10.1016/j.frl.2022.102821

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().