The Determinants of Corporate Debt Ownership Structure: Evidence from Market-Based and Bank-Based Economies

Managerial Finance, Vol. 34, No. 12, 2008

30 Pages Posted: 6 Dec 2009

Multiple version iconThere are 2 versions of this paper

Date Written: December 2, 2009

Abstract

We compare the determinants of the corporate debt ownership structure in a bank-oriented economy (Germany) and market-oriented economy (UK). The results, that are controlled for endogeneity, simultaneity and measurement errors, show that the firms in both countries adjust their debt ownership structure towards their target levels – British firms being the swifter. The evidence supports the predictions of the liquidation and renegotiation, and the flotation cost hypotheses in both countries. However, the moral hazard and adverse selection hypothesis receives support only in the UK. Moreover, the influence of market related factors on the choice of the lender is country dependent. Overall, the debt ownership structure of a firm is influenced by both the firm-specific factors and the financial traditions in which the firm operates.

Keywords: Dynamic debt ownership structure, Panel data, GMM

JEL Classification: G2, G32

Suggested Citation

Antoniou, Antonios and Guney, Yilmaz and Paudyal, Krishna N., The Determinants of Corporate Debt Ownership Structure: Evidence from Market-Based and Bank-Based Economies (December 2, 2009). Managerial Finance, Vol. 34, No. 12, 2008. Available at SSRN: https://ssrn.com/abstract=1517084

Antonios Antoniou

Wealth Associates ( email )

Alpine House,
Honeypot Lane
London, NW9 9RX
United Kingdom

Yilmaz Guney (Contact Author)

University of Hull ( email )

Hull, HU6 7RX
United Kingdom

HOME PAGE: http://https://www.hull.ac.uk/faculties/fblp/hubs.aspx

Krishna N. Paudyal

Independent ( email )

No Address Available

Register to save articles to
your library

Register

Paper statistics

Downloads
101
Abstract Views
678
rank
40,104
PlumX Metrics