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The separation of ownership and control and investment decisions in Mexican manufacturing firms

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  • Ruiz-Porras, Antonio
  • Lopez-Mateo, Celina

Abstract

We study how the ownership and control structures may explain investment decisions of Mexican manufacturing firms. We study them with aggregate indexes and the assessment of several regression sets. We use measures of ownership, management and agency costs. The econometric analysis uses longitudinal census data for 182 industries. Our findings support the claim that agency costs, as a measure of the separation of management and control, and firms` size can explain investment decisions. Furthermore the estimations support the necessity to include investment opportunities and cash flow as control variables. The coefficients of all variables are mostly significant and positive.

Suggested Citation

  • Ruiz-Porras, Antonio & Lopez-Mateo, Celina, 2010. "The separation of ownership and control and investment decisions in Mexican manufacturing firms," MPRA Paper 25237, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:25237
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    References listed on IDEAS

    as
    1. Madden, Gerald P., 1982. "The separation of ownership from control and investment performance," Journal of Economics and Business, Elsevier, vol. 34(2), pages 149-152.
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    6. Antonio Ruiz Porras & William Henry Steinwascher Sacio, 2008. "Gobierno corporativo, diversificación estratégica y desempeño empresarial en México," Revista de Administración, Finanzas y Economía (Journal of Management, Finance and Economics), Tecnológico de Monterrey, Campus Ciudad de México, vol. 2(1), pages 58-73.
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    More about this item

    Keywords

    Ownership; Control; Investment; Mexico; Manufacturing;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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