The inner structure of pyramid and capital structure: Evidence from China
AbstractThis paper examines the relationship between capital structure and the inner structure of pyramid in an emerging market economy country. The author uses firm-level panel data of Chinese listed companies to analyze the influence of the inner structure of pyramid on capital structure and the differences between different institutional environments of that influence deeply. His results show that the longer the layers of pyramid structure, the stronger the leverage effect of pyramid structure, as well as the ultimate controllers' motivation to expand debt financing will be. So the layers of pyramid structure have a significantly positive effect on capital structure. However, the chains of pyramid structure have no significant effects on capital structure. Compared with the areas with poor institutional environment, in the areas with better institutional environment, the effects of the layers of pyramid structure on corporate capital structure is relatively small. --
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2014-5.
Date of creation: 2014
Date of revision:
pyramid structure; institutional environment; capital structure; agent chain;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-15 (All new papers)
- NEP-SOG-2014-02-15 (Sociology of Economics)
- NEP-TRA-2014-02-15 (Transition Economics)
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