Ownership Structure, Financial Decisions, and Institutional Setting : An International Analysis through Simultaneous Equations
Joint Authors
López-Iturriaga, Félix J.
Rodríguez-Sanz, Juan Antonio
Source
Economics Research International
Issue
Vol. 2012, Issue 2012 (31 Dec. 2012), pp.1-12, 12 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2012-08-23
Country of Publication
Egypt
No. of Pages
12
Main Subjects
Abstract EN
We analyze the mutual relations among firms’ capital structure, ownership structure, and valuation.
Through the estimation of a system of simultaneous equations for a sample of 1,130 firms from 16 countries from both the common law and the civil law environments, our results confirm the differential effect of ownership structure on firms’ value in each setting.
Whereas in civil law firms the higher ownership concentration results in an entrenchment and an alignment effect, in the common law firms higher ownership concentration increases the value of the firm.
Second, we corroborate the endogeneity of ownership structure since we find that ownership structure is affected by the value of the firm and by the capital structure.
Third, our results suggest that corporate finance decisions are taken simultaneously with other mechanisms of corporate governance and conditional on firms’ valuation.
American Psychological Association (APA)
López-Iturriaga, Félix J.& Rodríguez-Sanz, Juan Antonio. 2012. Ownership Structure, Financial Decisions, and Institutional Setting : An International Analysis through Simultaneous Equations. Economics Research International،Vol. 2012, no. 2012, pp.1-12.
https://search.emarefa.net/detail/BIM-473719
Modern Language Association (MLA)
López-Iturriaga, Félix J.& Rodríguez-Sanz, Juan Antonio. Ownership Structure, Financial Decisions, and Institutional Setting : An International Analysis through Simultaneous Equations. Economics Research International No. 2012 (2012), pp.1-12.
https://search.emarefa.net/detail/BIM-473719
American Medical Association (AMA)
López-Iturriaga, Félix J.& Rodríguez-Sanz, Juan Antonio. Ownership Structure, Financial Decisions, and Institutional Setting : An International Analysis through Simultaneous Equations. Economics Research International. 2012. Vol. 2012, no. 2012, pp.1-12.
https://search.emarefa.net/detail/BIM-473719
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-473719