Chernenko, Demid (2018): Capital Structure and Oligarch Ownership. Forthcoming in: Economic Change and Restructuring
Preview |
PDF
MPRA_paper_83641.pdf Download (481kB) | Preview |
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 |
---|---|
Original Title: | Capital Structure and Oligarch Ownership |
English Title: | Capital Structure and Oligarch Ownership |
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 |
Item ID: | 83641 |
Depositing User: | Demid Chernenko |
Date Deposited: | 06 Jan 2018 12:20 |
Last Modified: | 26 Sep 2019 08:51 |
References: | Baum, Christopher F., Mustafa Caglayan, Dorothea Schäfer, and Oleksandr Talavera. 2008. “Political patronage in Ukrainian banking”. Economics of Transition 16 (3):537–557. Booth, Laurence, Varouj Aivazian, Asli Demirguc-Kunt, and Vojislav Maksimovic. 2001. “Capital structures in developing countries”. Journal of Finance 56 (1): 87–130. Chang, Sea Jin, and Jaebum Hong. 2000. “Economic performance of group-affiliated companies in Korea: Intragroup resource sharing and internal business transactions”. Academy of Management Journal 43 (3): 429–448. Charumilind, Chutatong, Raja Kali, and Yupana Wiwattanakantang. 2006. “Connected Lending: Thailand before the Financial Crisis”. The Journal of Business 79 (1): 181– 218. De Haas, Ralph, and Marga Peeters. 2006. “The dynamic adjustment towards target capital structures of firms in transition economies”. Economics of Transition 14 (1): 133–169. Dinç, I. Serdar. 2005. “Politicians and banks: Political influences on government-owned banks in emerging markets”. Journal of Financial Economics 77 (2): 453–479. Driffield, Nigel, Vidya Mahambare, and Sarmistha Pal. 2007. “How does ownership structure affect capital structure and firm value? Recent evidence from East Asia”. Economics of Transition 15 (3): 535–573. Ebrahim, M. Shahid, Sourafel Girma, M. Eskandar Shah, and Jonathan Williams. 2014. “Dynamic capital structure and political patronage: The case of Malaysia”. International Review of Financial Analysis 31:117–128. Faccio, Mara. 2006. “Politically connected firms”. American Economic Review 96 (1): 369–386. Faccio, Mara, Ronald W. Masulis, and John J. Mcconnell. 2006. “Political connections and corporate bailouts”. Journal of Finance 61 (6): 2597–2635. Fama, Eugene F., and Kenneth R. French. 2002. “Testing Trade-Off and Pecking Order Predictions About Dividends and Debt”. Review of Financial Studies 15 (1): 1–33. Fisman, Raymond. 2001. “Estimating the Value of Political Connections”. American Economic Review 91 (4): 1095–1102. Flannery, Mark J., and Kasturi P. Rangan. 2006. “Partial adjustment toward target capital structures”. Journal of Financial Economics 79 (3): 469–506. Fraser, Donald R., Hao Zhang, and Chek Derashid. 2006. “Capital structure and political patronage: The case of Malaysia”. Journal of Banking and Finance 30 (4): 1291–1308. Gokhberg, Leonid, and Vitaliy Roud. 2016. “Structural changes in the national innovation system: longitudinal study of innovation modes in the Russian industry”. Economic Change and Restructuring 49 (2): 269–288. Gorodnichenko, Yuriy, and Yegor Grygorenko. 2008. “Are oligarchs productive? Theory and evidence”. Journal of Comparative Economics 36 (1): 17–42. Guriev, Sergei, and Andrei Rachinsky. 2005. “The Role of Oligarchs in Russian Capitalism”. Journal of Economic Perspectives 19 (1): 131–150. Ivashkovskaya, Irina V., and Maria S. Solntseva. 2007. “The capital structure of Russian companies: testing trade-off theory versus pecking order theory”. Journal of Corporate Finance Research 1 (2): 17–31. Jensen, Michael C. 1986. “Agency costs of free cash flow, corporate finance, and takeovers”. The American Economic Review 76 (2): 323–329. Jensen, Michael C., and William H. Meckling. 1976. “Theory of the firm: Managerial behavior, agency costs and ownership structure”. Journal of Financial Economics 3 (4): 305–360. Jõeveer, Karin. 2013. “Firm, country and macroeconomic determinants of capital structure: Evidence from transition economies”. Journal of Comparative Economics 41 (1): 294–308. Khwaja, Asim Ijaz, and Atif Mian. 2005. “Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market”. The Quarterly Journal of Economics 120 (4): 1371–1411. Manos, Ronny, Victor Murinde, and Christopher J. Green. 2007. “Leverage and business groups: Evidence from Indian firms”. Journal of Economics and Business 59 (5): 443– 465. Maury, Benjamin, and Eva Liljeblom. 2009. “Oligarchs, political regime changes, and firm valuation”. Economics of Transition 17 (3): 411–438. Myers, Stewart C. 1977. “Determinants of corporate borrowing”. Journal of Financial Economics 5 (2): 147–175. Nivorozhkin, Eugene. 2004. “The dynamics of capital structure in transition economies”. Economics of Planning 37 (1): 25–45. Nivorozhkin, Eugene. 2005. “Financing choices of firms in EU accession countries”. Emerging Markets Review 6 (2): 138–169. Pöyry, Salla, and Benjamin Maury. 2010. “Influential ownership and capital structure”. Managerial and Decision Economics 31 (5): 311–324. Rajan, R G, and L Zingales. 1995. “What Do We Know About Capital Structure - Some Evidence From International Data”. Journal of Finance 50 (5): 1421–1460. Saeed, Abubakr, Yacine Belghitar, and Ephraim Clark. 2015. “Political Connections and Leverage: Firm-level Evidence from Pakistan.” Managerial and Decision Economics 36 (6): 364–383. Saeed, Abubakr, Yacine Belghitar, and Ephraim Clark. 2017. “Political connections and firm operational efficiencies: evidence from a developing country”. Review of Managerial Science 11 (1): 191–224. Stephan, Andreas, Oleksandr Talavera, and Andriy Tsapin. 2011. “Corporate debt maturity choice in emerging financial markets”. Quarterly Review of Economics and Finance 51 (2): 141–151. Strebulaev, Ilya A. 2007. “Do Tests of Capital Structure Theory Mean What They Say?” The Journal of Finance 62 (4): 1747–1787. Welch, Ivo. 2011. “Two common problems in capital structure research: The financial debt-to-asset ratio and issuing activity versus leverage changes”. International Review of Finance 11 (1): 1–17. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/83641 |