The Effects of Ownership Structure on Corporate Financing Decisions: Evidence from Stock Market Liberalization

23 Pages Posted: 3 Sep 2013

See all articles by Thomas Flavin

Thomas Flavin

National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics, Finance and Accounting

Thomas O’Connor

National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics, Finance and Accounting

Date Written: September 2013

Abstract

We analyze the impact of firm‐specific stock market liberalization events on the capital structure and debt maturity decisions of firms from emerging market economies. We differentiate between firms based on their ownership structures at the time of liberalization and analyze their post‐liberalization behavior regarding corporate financing decisions. Our empirical results show that single–class‐share firms (typically with stronger corporate governance and better information environments) respond differently to their dual–class‐share counterparts. Liberalization results in lower debt reliance for the former group while the latter lengthen the maturity of their debt portfolios.

JEL Classification: F30, G15, G32

Suggested Citation

Flavin, Thomas J and O'Connor, Thomas, The Effects of Ownership Structure on Corporate Financing Decisions: Evidence from Stock Market Liberalization (September 2013). International Review of Finance, Vol. 13, Issue 3, pp. 383-405, 2013, Available at SSRN: https://ssrn.com/abstract=2319630 or http://dx.doi.org/10.1111/irfi.12014

Thomas J Flavin

National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics, Finance and Accounting ( email )

County Kildare
Ireland
+353 1 708 3369 (Phone)
+353 1 708 3934 (Fax)

Thomas O'Connor

National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics, Finance and Accounting ( email )

County Kildare
Ireland

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