Ownership and capital structure of pakistani non-financial firms

• Authors: Shoaib Khan , Yasushi Suzuki
• Languages of publication: EN

Abstracts

EN

Existi ng literature has not yet defi ned a clear-cut relati onship between ownership structure and capital structure. This study aims to contribute to this controversial argument by examining the impact of internal (managerial) ownership and external ownership on fi nancing preferences using the case of non-fi nancial fi rms listed on Karachi stock exchange during the period of 2008-2012. Our results suggest that the external ownership has a signifi cant eff ect on capital structure in accordance with the presence of blockholders. In contrast, the internal ownership has a complicated eff ect; it shows signifi cant positi ve and negati ve relati onship to leverage at lower and certain higher proporti on of managerial shareholding respecti vely. Besides, the combined analyses suggest that the presence of blockholders negates the impact of managerial ownership on capital structure. This implies that the presence of large and dominant shareholders in Pakistani fi rms may have caused a bias for debt fi nancing to protect their voti ng power and returns.

Keywords

EN

capital structure; ownership structure; shareholders; Pakistan

• Publisher: Wyższa Szkoła Informatyki i Zarządzania z siedzibą w Rzeszowie
• Journal: Finansowy Kwartalnik Internetowy e-Finanse
• Year: 2016
• Volume: 12
• Issue: 1
• Pages: 57-67

Dates

published

2016-07-20

Contributors

author

Shoaib Khan

• Ritsumeikan Asia Pacifi c University

author

Yasushi Suzuki

• Ritsumeikan Asia Pacifi c University