Ownership Concentration and the Determinants of Capital Structure in Latin America

In this paper we study the capital structure determinants of Latin American firms using a comprehensive sample from 1996 to 2005 covering seven countries. We argue that ownership control is important for capital structure decisions in Latin America, where firms present a higher ownership concentrati...

Descripción completa

Detalles Bibliográficos
Autores Principales: Céspedes, Jacelly, González Ferrero, Maximiliano, Molina Manzano, Carlos Alberto
Formato: Desconocido (Unknown)
Lenguaje:Español (Spanish)
Publicado: Universidad de los Andes, Facultad de Administración 2020
Materias:
Acceso en línea:http://hdl.handle.net/1992/46378
id ir-1992-46378
recordtype dspace
spelling ir-1992-463782020-11-05T21:02:35Z Ownership Concentration and the Determinants of Capital Structure in Latin America Concentración de propiedad y los determinantes de la estructura de capital en Latinoamérica Céspedes, Jacelly González Ferrero, Maximiliano Molina Manzano, Carlos Alberto Capital Structure Ownership Control Emerging Markets Latin America Capital - América Latina Propiedad - América Latina Mercados emergentes - América Latina In this paper we study the capital structure determinants of Latin American firms using a comprehensive sample from 1996 to 2005 covering seven countries. We argue that ownership control is important for capital structure decisions in Latin America, where firms present a higher ownership concentration. We find a U-shape relation between ownership concentration and leverage. When ownership concentration is low its effect on leverage is negative, and when ownership concentration is high its effect on leverage is positive. This U-shape relation is consistent with the argument that ownership-concentrated firms avoid equity issuing because they do not want to share or to lose control, and this effect is contrary if the ownership structure has enough dispersion and losing control is not an issue. Consistent with the control argument, we also find that firms with more growth opportunities exhibit higher leverage. In addition, and consistent with previous literature on developed countries, we find that other factors that do not proxy for ownership control are important determinants of leverage. Firms that are larger, with more tangible assets, and that are less profitable are also more leveraged. 1. Introduction. 2. Data and research design. 3. Results. 4. Robustness. 5. Conclusions. References. 2020-09-21T15:19:00Z 2020-09-21T15:19:00Z 2008 document publishedVersion 1900-1606 http://hdl.handle.net/1992/46378 spa Galeras de Administración, No. 20 openAccess application/pdf Universidad de los Andes, Facultad de Administración instname:Universidad de los Andes reponame:Repositorio Institucional Séneca
institution Universidad de los Andes
collection DSpace
language Español (Spanish)
topic Capital Structure
Ownership Control
Emerging Markets
Latin America
Capital - América Latina
Propiedad - América Latina
Mercados emergentes - América Latina
spellingShingle Capital Structure
Ownership Control
Emerging Markets
Latin America
Capital - América Latina
Propiedad - América Latina
Mercados emergentes - América Latina
Céspedes, Jacelly
González Ferrero, Maximiliano
Molina Manzano, Carlos Alberto
Ownership Concentration and the Determinants of Capital Structure in Latin America
description In this paper we study the capital structure determinants of Latin American firms using a comprehensive sample from 1996 to 2005 covering seven countries. We argue that ownership control is important for capital structure decisions in Latin America, where firms present a higher ownership concentration. We find a U-shape relation between ownership concentration and leverage. When ownership concentration is low its effect on leverage is negative, and when ownership concentration is high its effect on leverage is positive. This U-shape relation is consistent with the argument that ownership-concentrated firms avoid equity issuing because they do not want to share or to lose control, and this effect is contrary if the ownership structure has enough dispersion and losing control is not an issue. Consistent with the control argument, we also find that firms with more growth opportunities exhibit higher leverage. In addition, and consistent with previous literature on developed countries, we find that other factors that do not proxy for ownership control are important determinants of leverage. Firms that are larger, with more tangible assets, and that are less profitable are also more leveraged.
format Desconocido (Unknown)
author Céspedes, Jacelly
González Ferrero, Maximiliano
Molina Manzano, Carlos Alberto
author_facet Céspedes, Jacelly
González Ferrero, Maximiliano
Molina Manzano, Carlos Alberto
author_sort Céspedes, Jacelly
title Ownership Concentration and the Determinants of Capital Structure in Latin America
title_short Ownership Concentration and the Determinants of Capital Structure in Latin America
title_full Ownership Concentration and the Determinants of Capital Structure in Latin America
title_fullStr Ownership Concentration and the Determinants of Capital Structure in Latin America
title_full_unstemmed Ownership Concentration and the Determinants of Capital Structure in Latin America
title_sort ownership concentration and the determinants of capital structure in latin america
publisher Universidad de los Andes, Facultad de Administración
publishDate 2020
url http://hdl.handle.net/1992/46378
_version_ 1705932391541899264
score 11,828437