The separation of ownership and control and investment decisions in Mexican manufacturing firms

Antonio Ruiz-Porras and Celina Lopez-Mateo

MPRA Paper from University Library of Munich, Germany

Abstract: We study how the ownership and control structures may explain investment decisions of Mexican manufacturing firms. We study them with aggregate indexes and the assessment of several regression sets. We use measures of ownership, management and agency costs. The econometric analysis uses longitudinal census data for 182 industries. Our findings support the claim that agency costs, as a measure of the separation of management and control, and firms` size can explain investment decisions. Furthermore the estimations support the necessity to include investment opportunities and cash flow as control variables. The coefficients of all variables are mostly significant and positive.

Keywords: Ownership; Control; Investment; Mexico; Manufacturing (search for similar items in EconPapers)
JEL-codes: G30 L60 (search for similar items in EconPapers)
Date: 2010-09-20
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