Capital Structure and Oligarch Ownership

Chernenko, Demid (2018): Capital Structure and Oligarch Ownership. Forthcoming in: Economic Change and Restructuring

Abstract

This study examines the effects of oligarch ownership on corporate capital structures. Using panel data from Ukraine, I find that oligarch-owned companies employ significantly more debt and liabilities than their peers. However, there is no direct relation between oligarch ownership and target capital structure. Whereas the determinants of target leverage are similar across all owners, differences in firm characteristics also have a fairly small effect. I show that larger leverage is due to better access to debt, which results in lower rebalancing costs and faster restructurings of oligarch-owned companies. The findings clearly suggest that oligarchs benefit from the accumulated advantages.

• Item Type: MPRA Paper
• Language: English
• Keywords: Capital Structure; Leverage; Oligarchs; Influential Ownership; Connected Firms; Cumulative Advantage
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P31 - Socialist Enterprises and Their Transitions

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