Ownership structure and the cost of corporate borrowing

• 成果类型: Article
• 署名作者: Lin, Chen; Ma, Yue; Malatesta, Paul; Xuan, Yuhai
• 署名单位: University of Washington; University of Washington Seattle; Chinese University of Hong Kong; Lingnan University; Harvard University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.10.012
• 发表日期: 2011
• 页码: 1-23
• 关键词: ownership structure; Excess control rights; Control-ownership wedge; Cost of debt; bank loans

摘要

This article identifies an important channel through which excess control rights affect firm value. Using a new, hand-collected data set on corporate ownership and control of 3,468 firms in 22 countries during the 1996-2008 period, we find that the cost of debt financing is significantly higher for companies with a wider divergence between the largest ultimate owner's control rights and cash-flow rights and investigate factors that affect this relation. Our results suggest that potential tunneling and other moral hazard activities by large shareholders are facilitated by their excess control rights. These activities increase the monitoring costs and the credit risk faced by banks and, in turn, raise the cost of debt for the borrower. (C) 2010 Elsevier B.V. All rights reserved.