IDEAS home Printed from https://ideas.repec.org/a/spr/jknowl/v16y2025i2d10.1007_s13132-024-02229-9.html
   My bibliography  Save this article

Common Institutional Ownership and Corporate Leverage Manipulation

Author

Listed:
  • Bin Dai

    (Sichuan International Studies University
    Sichuan International Studies University)

  • Shiyao Min

    (Sichuan International Studies University)

  • Qiqi Wu

    (Sichuan International Studies University)

Abstract

“Deleveraging” is a key starting point for preventing and resolving major risks, especially financial risks. This paper studies the impact of common institutional ownership on corporate deleveraging behavior from the perspective of leverage manipulation. The study shows that common institutional ownership can significantly inhibit corporate leverage manipulation and that managerial myopia and internal control quality play negative and positive moderating roles in the above relationship, and its mechanism is mainly to alleviate the degree of financing constraints, reduce the degree of information asymmetry, and then play the governance efficacy of common institutional ownership. It is further found that the governance effect of common ownership is more significant in the sample of firms after the implementation of the “deleveraging” policy, in the sample of non-state-owned firms, in the sample of firms without directors’ liability insurance, and in the sample of firms with weaker managerial competence. The economic consequence test shows that common institutional ownership improves investment efficiency and reduces risk-taking by constraining leverage manipulation. This paper explores the impact of this emerging form of ownership on corporate governance and corporate leverage manipulation from the perspective of institutional common ownership, which is of great practical value in promoting the sound development of the capital market.

Suggested Citation

  • Bin Dai & Shiyao Min & Qiqi Wu, 2025. "Common Institutional Ownership and Corporate Leverage Manipulation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(2), pages 10452-10492, June.
    • Handle: RePEc:spr:jknowl:v:16:y:2025:i:2:d:10.1007_s13132-024-02229-9
    DOI: 10.1007/s13132-024-02229-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13132-024-02229-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13132-024-02229-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jknowl:v:16:y:2025:i:2:d:10.1007_s13132-024-02229-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.