Ownership Structure and the Cost of Debt
European Accounting Review, Forthcoming
Posted: 11 Nov 2009
Date Written: November 11, 2009
This paper examines the impact on the cost of debt by ownership concentration and shareholder identity; that is, whether the shareholders are banks, non-financial firms, the state, institutional investors, or the board of directors. Our analysis suggests that directors who own shares tend to be aligned with external shareholders, that firms with government ownership enjoy lower cost of debt, and that banks effectively monitor management, so reducing the agency costs of debt.
Keywords: cost debt, corporate governance, ownership structure
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