Influential ownership and capital structure

Salla Pöyry and Benjamin Maury
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Salla Pöyry: Department of Finance and Statistics, HANKEN School of Economics, Helsinki, Finland, Postal: Department of Finance and Statistics, HANKEN School of Economics, Helsinki, Finland
Benjamin Maury: Department of Finance and Statistics, HANKEN School of Economics, Helsinki, Finland, Postal: Department of Finance and Statistics, HANKEN School of Economics, Helsinki, Finland

Managerial and Decision Economics, 2010, vol. 31, issue 5, 311-324

Abstract: This paper explores the relation between ownership structures and capital structures in Russia-an economy with a state-run banking sector, weak corporate governance, and highly concentrated ownership. We find that firms with the state as controlling shareholder have significantly higher leverage than firms controlled by domestic private controlling shareholders other than oligarchs. Both firms controlled by the state or oligarchs finance their growth with more debt than other firms. Profitability is negatively related to leverage across all types of controlling owners, indicating a preference for internal funding over debt. The results indicate that firms with owners that have political influence or ties to large financial groups enjoy better access to debt. Copyright © 2009 John Wiley & Sons, Ltd.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:31:y:2010:i:5:p:311-324

DOI: 10.1002/mde.1477

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