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Influential ownership and capital structure

Author

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  • Salla Pöyry

    (Department of Finance and Statistics, HANKEN School of Economics, Helsinki, Finland)

  • Benjamin Maury

    (Department of Finance and Statistics, HANKEN School of Economics, Helsinki, Finland)

Abstract

This paper explores the relation between ownership structures and capital structures in Russia-an economy with a state-run banking sector, weak corporate governance, and highly concentrated ownership. We find that firms with the state as controlling shareholder have significantly higher leverage than firms controlled by domestic private controlling shareholders other than oligarchs. Both firms controlled by the state or oligarchs finance their growth with more debt than other firms. Profitability is negatively related to leverage across all types of controlling owners, indicating a preference for internal funding over debt. The results indicate that firms with owners that have political influence or ties to large financial groups enjoy better access to debt. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Salla Pöyry & Benjamin Maury, 2010. "Influential ownership and capital structure," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(5), pages 311-324.
  • Handle: RePEc:wly:mgtdec:v:31:y:2010:i:5:p:311-324
    DOI: 10.1002/mde.1477
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    File URL: http://hdl.handle.net/10.1002/mde.1477
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    References listed on IDEAS

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    Cited by:

    1. Namazi, Mohammad & Shokrolahi, Ahmad & Sadeghzadeh Maharluie, Mohammad, 2016. "Detecting and ranking cash flow risk factors via artificial neural networks technique," Journal of Business Research, Elsevier, vol. 69(5), pages 1801-1806.
    2. repec:eco:journ1:2017-03-17 is not listed on IDEAS
    3. Siti Nur Aqilah Ab Wahab & Nur Ainna Ramli, 2014. "The Determinants of Capital Structure: An Empirical Investigation of Malaysian Listed Government Linked Companies," International Journal of Economics and Financial Issues, Econjournals, vol. 4(4), pages 930-945.
    4. Berezinets, Irina & Ilina, Yulia & Muravyev, Alexander, 2011. "CEO and Board Characteristics as Determinants of Private Benefits of Control: Evidence from the Russian Stock Exchange," IZA Discussion Papers 6256, Institute for the Study of Labor (IZA).
    5. Chernenko, Demid, 2018. "Capital Structure and Oligarch Ownership," MPRA Paper 83641, University Library of Munich, Germany.

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