Actual controller’s foreign residency and firm leverage: evidence from China

Timothy (Jun) Lu, Jinjuan Ren () and Elaine (Chang) Liu

Applied Economics Letters, 2020, vol. 27, issue 8, 620-623

Abstract: We investigate how the characteristics of firms’ actual controllers influence firms’ access to external finance. Using hand-collected data of actual controllers of Chinese firms, we find that firms have significantly lower leverage when the actual controllers have foreign residency. Whereas actual controllers’ political connection increases firm leverage, such effect is fully eroded when the actual controllers have foreign residency.

Date: 2020
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DOI: 10.1080/13504851.2020.1728220

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