UK and US multinational corporations capital structure: different approaches to shareholder value maximization

Floarea Iosub Dobrica ()
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Floarea Iosub Dobrica: The Department of Economics, Quantitative Analysis and Business Information Systems, Faculty of Economics and Business Administration, Alexandru Ioan Cuza University

Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), 2007, vol. 54, 126-132

Abstract: The shareholder value maximization is the keystone of the actual stage of capitalism. The objective function of publicly quoted corporations is nowadays the maximization of the shareholders' wealth, i.e. the sum of dividends and capital gains. Despite the increasing international financial opening, the shareholder value model, usually associated with UK and US, is typically presented as opposed to that of Continental Europe (i.e. Germany, France) and Japan. Yet, less attention is paid to the particularities of the shareholder value model across its representative countries. Are American and British corporations using similar financial strategies in response to shareholders exigencies? The empirical analysis conducted herein allows us to assert that, despite the association of both countries to the same model, there are striking differences in the financing strategies of UK and US MNCs.

Keywords: shareholder value; multinational corporations (MNCs); capital structure; agency problem; market timing; payout ratio; stock buyback; equity-issue. (search for similar items in EconPapers)
Date: 2007
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