OWNERSHIP AND CAPITAL STRUCTURE OF PAKISTANI NON-FINANCIAL FIRMS

Khan Shoaib () and Yasushi Suzuki
Additional contact information
Khan Shoaib: Ritsumeikan Asia Pacifi c University

"e-Finanse", 2016, vol. 12, issue 1, 57-67

Abstract: Existi ng literature has not yet defi ned a clear-cut relati onship 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 fi nancing preferences using the case of non-fi nancial fi rms listed on Karachi stock exchange during the period of 2008-2012. Our results suggest that the external ownership has a signifi cant eff ect on capital structure in accordance with the presence of blockholders. In contrast, the internal ownership has a complicated eff ect; it shows signifi cant positi ve and negati ve relati onship to leverage at lower and certain higher proporti on of managerial shareholding respecti vely. 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 fi rms may have caused a bias for debt fi nancing to protect their voti ng power and returns.

Keywords: capital structure; ownership structure; shareholders; Pakistan (search for similar items in EconPapers)
JEL-codes: C51 G32 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.e-finanse.com/artykuly_eng/336.pdf (application/pdf)

Related works:
Journal Article: Ownership and Capital Structure of Pakistani Non Financial Firms (2016)
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:rze:efinan:v:12:y:2016:i:1:p:57-67

Access Statistics for this article

More articles in "e-Finanse" from University of Information Technology and Management, Institute of Financial Research and Analysis Contact information at EDIRC.
Bibliographic data for series maintained by Pawel Bochenek ( this e-mail address is bad, please contact ).