Corporate governance and leverage: Evidence from a natural experiment
AbstractWe argue that the recent corporate governance reform in the Netherlands provides a natural experiment to explore the impact of changes in corporate governance on financing policy. We find that, relative to a control sample of comparable firms outside the Netherlands, Dutch firms significantly reduced their leverage following the passage of the reform. Our findings are consistent with the view that corporate governance improvements reduce the value of debt as a disciplining device.
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Bibliographic InfoArticle provided by Elsevier in its journal Finance Research Letters.
Volume (Year): 7 (2010)
Issue (Month): 2 (June)
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Web page: http://www.elsevier.com/locate/frl
Corporate governance Corporate leverage Financing policy;
Other versions of this item:
- Stefan Arping & Zacharias Sautner, 2010. "Corporate Governance and Leverage: Evidence from a Natural Experiment," Tinbergen Institute Discussion Papers 10-019/2, Tinbergen Institute.
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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