Ownership structure, control contestability, and corporate debt maturity

Ben‐Nasr, Hamdi; Boubaker, Sabri; Rouatbi, Wael

doi:10.1016/j.jcorpfin.2015.10.001

Cited by 147 publications

(78 citation statements)

References 85 publications

(157 reference statements)

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“…Sun et al (2015) find that institutional ownership is positively related to firm leverage levels. They show that the presence of institutional shareholders encourages firms to choose debt as a governance mechanism to constrain managerial entrenchment, which is consistent with Ben-Nasr, Boubaker and Rouatbi (2015), who find that the presence of multiple large shareholders is associated with shorter debt maturity. These findings indicate that entrenched controlling owners prefer longer debt maturity to avoid frequent monitoring by the debt market, which suggests that the institutional ownership concentration may moderate the relationship between ultimate ownership concentration and leverage.…”

Section: Introductionsupporting

confidence: 75%

The Influence of Ultimate Ownership Concentration on Leverage

Chee¹,

Hooy

Ooi³

2016

Pengurusan

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Section: Introductionsupporting

confidence: 75%

The Influence of Ultimate Ownership Concentration on Leverage

Chee¹,

Hooy

Ooi³

2016

Pengurusan

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“…However, our understanding of the role of MLS in financing decisions remains limited. Few studies have attempted to investigate this role and have shown that the effect of MLS on firms’ financing decisions stems from their incentives and ability to monitor controlling owners (Ben‐Nasr, Boubaker, and Rouatbi, ; Cai et al., ). Thus, MLS would be expected to have no effect on financing decisions in general, and debt choice in particular, in the absence of agency conflicts between controlling and minority shareholders.…”

Section: Related Literature and Hypotheses Developmentmentioning

confidence: 99%

The Role of Multiple Large Shareholders in the Choice of Debt Source

Boubaker¹,

Rouatbi²,

Saffar

2016

Financial Management

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This paper examines the effect of multiple large shareholders (MLS) on debt choice. Using a sample of 654 French‐listed firms over the period 1998‐2013, we find that reliance on bank debt increases with the presence and voting power of MLS. This result is robust to endogeneity concerns and to several sensitivity tests. Moreover, we find that the effect of MLS on debt choice is more pronounced when agency problems between controlling and minority shareholders are more severe. Taken together, our results suggest that MLS reduce the controlling owner's incentive to avoid bank monitoring, leading to greater reliance on bank debt.

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“…Kirch and Terra (2012) analyze firm-level data from five South American countries and conclude that the institutional quality of a country has a significant positive effect on the level of long-term debt in a firm's financial structure. Using the ownership structures of French firms, Ben-Nasr, Boubaker, and Rouatbi (2015) find that firms with multiple large shareholders tend to have debt with shorter maturity. Awartani, Belkhir, Boubaker, and Maghyereh (2016) show that stronger rule of law, better regulatory effectiveness, better legal protection of creditors, and more developed financial intermediaries are associated with greater use of long-term borrowing by Middle East and North African firms.…”

Section: Introductionmentioning

confidence: 99%