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- Title
The Role of Multiple Large Shareholders in the Choice of Debt Source.
- Authors
Boubaker, Sabri; Rouatbi, Wael; Saffar, Walid
- Abstract
This paper examines the effect of multiple large shareholders (MLS) on debt choice. Using a sample of 654 French-listed firms over the period 1998-2013, we find that reliance on bank debt increases with the presence and voting power of MLS. This result is robust to endogeneity concerns and to several sensitivity tests. Moreover, we find that the effect of MLS on debt choice is more pronounced when agency problems between controlling and minority shareholders are more severe. Taken together, our results suggest that MLS reduce the controlling owner's incentive to avoid bank monitoring, leading to greater reliance on bank debt.
- Subjects
STOCKHOLDERS; CORPORATE debt; ENDOGENEITY (Econometrics); CORPORATE debt financing; CASH flow
- Publication
Financial Management (Wiley-Blackwell), 2017, Vol 46, Issue 1, p241
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/fima.12148