How does ownership structure affect capital structure and firm value?

Nigel L. Driffield (), Vidya Mahambare and Sarmistha Pal ()

The Economics of Transition, 2007, vol. 15, pages 535-573

Abstract: The present paper examines the effects of ownership structures on capital structure and firm valuation. It argues that the effects of separation of control from cash flow rights on capital structure and firm value also depend on the separation of control from management as well as on legal rules and enforcement defining investors' protection. We obtain firm-level panel data (three stage least squares, 3SLS) estimates from four of the East Asian countries worst affected by the last crisis. There is evidence that the general wisdom that higher control than cash flow rights may lower firm value may be reversed among owner-managed family firms in the sample countries. Copyright (c) 2007 The Authors
Journal compilation (c) 2007 The European Bank for Reconstruction and Development .

Date: 2007
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