The Influence of Corporate Governance on the Relation between Capital Structure and Value

26 Pages Posted: 4 Nov 2005

See all articles by Maurizio La Rocca

Maurizio La Rocca

Università degli Studi della Calabria

Date Written: October 15, 2005

Abstract

The present paper focuses on a well-known topic in the financial literature: the relation between capital structure and firm value. The controversial empirical results on this topic can be attributable to a lack of attention to the interaction between capital structure and other corporate governance variables. In fact, capital structure represents a corporate governance device as others. The debate needs to take directly into account the role of moderation and/or mediation of the corporate governance on the relation between capital structure and firm's value. To appreciate the relation between capital structure and firm value it is necessary to consider the presence of complementarity with other corporate governance variables as ownership concentration, managerial ownership, the role of the Board of Directors, and so on. The paper, after a synthetic review of the theoretical literature, provides a theoretical model, and some suggestions, that should be applied for future empirical research on this topic.

Keywords: capital structure, corporate governance and value

JEL Classification: G3

Suggested Citation

La Rocca, Maurizio, The Influence of Corporate Governance on the Relation between Capital Structure and Value (October 15, 2005). Available at SSRN: https://ssrn.com/abstract=835384 or http://dx.doi.org/10.2139/ssrn.835384

Maurizio La Rocca (Contact Author)

Università degli Studi della Calabria ( email )

Ponte Bucci, Cubo 3C
Rende (Cosenza), Cosenza 87036
Italy

HOME PAGE: http://www.mauriziolarocca.it

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,520
Abstract Views
4,331
rank
14,119
PlumX Metrics