Ownership Structure and the Cost of Debt

European Accounting Review, Forthcoming

Posted: 11 Nov 2009

Date Written: November 11, 2009

Abstract

This paper examines the impact on the cost of debt by ownership concentration and shareholder identity; that is, whether the shareholders are banks, non-financial firms, the state, institutional investors, or the board of directors. Our analysis suggests that directors who own shares tend to be aligned with external shareholders, that firms with government ownership enjoy lower cost of debt, and that banks effectively monitor management, so reducing the agency costs of debt.

Keywords: cost debt, corporate governance, ownership structure

Suggested Citation

Sánchez-Ballesta, Juan P. and García-Meca, Emma, Ownership Structure and the Cost of Debt (November 11, 2009). European Accounting Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1503915

Juan P. Sánchez-Ballesta

University of Murcia ( email )

Avda Teniente Flomesta, 5
Murcia, Murcia 30100
Spain

Emma García-Meca (Contact Author)

Universidad Politécnica de Cartagena ( email )

Departamento Economia Financiera y Contabilidad
Cartagena, Murcia 30201
Spain

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