Corporate Governance and Leverage: Evidence from a Natural Experiment
AbstractThis discussion paper led to a publication in Finance Research Letters , 7(2), 127-34. We 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 InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 10-019/2.
Date of creation: 05 Feb 2010
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Corporate Governance; Corporate Leverage; Financing Policy;
Other versions of this item:
- Arping, Stefan & Sautner, Zacharias, 2010. "Corporate governance and leverage: Evidence from a natural experiment," Finance Research Letters, Elsevier, vol. 7(2), pages 127-134, June.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
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