Creditor protection, shareholder protection, and cost of debt financing around the world

Thi Huong Dao, Quoc Trung Tran, Thi Mai Nguyen and Tran Sy Nguyen
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Thi Huong Dao: Thuyloi University, Ha Noi, Vietnam

Australian Journal of Management, 2023, vol. 48, issue 1, 90-107

Abstract: Debt financing plays an important role in corporate financial decisions. Therefore, the cost of debt is an interesting topic in corporate finance. Using a sample of 153,784 observations across 30 countries from 2003 to 2016, we find that creditor rights positively affect the cost of debt. In addition, the effect of shareholder rights is weaker in countries with stronger creditor protection. JEL Classification: G32, G34

Keywords: Cost of debt; creditor protection; debt financing; shareholder protection (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:48:y:2023:i:1:p:90-107

DOI: 10.1177/03128962221083375

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