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Stock market liquidity, family ownership, and capital structure choices in an emerging country

Mona Elbannan

Emerging Markets Review, 2017, vol. 33, issue C, 201-231

Abstract: This study examines the impact of equity liquidity and family ownership on capital structure decisions in an emerging market context. Using univariate analysis, I find a positive relationship between liquidity and leverage. Further, this study uses multivariate panel regression analysis with firm clustering, and controls for other variables. Contrary to studies on U.S. firms, I find insignificant empirical evidence that stock liquidity increases leverage for Egyptian firms. Moreover, evidence shows a significant positive relationship between family ownership and leverage. These results hold when employing the instrumental variables approach and estimating two-stage least Squares regressions to control for the endogeneity problem.

Keywords: Corporate capital structure; Emerging markets; Equity liquidity; Family ownership; Leverage (search for similar items in EconPapers)
Date: 2017
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