Foreign institutional ownership and the speed of leverage adjustment: International evidence
نویسندگان
چکیده
Employing a large sample of 7246 firms across 38 economies from 2000 to 2013, we show positive relation between foreign institutional ownership (FIO) and firms' speed leverage adjustment. This is concentrated for over-leveraged that need decrease financial rebalance their capital structures. We validate our findings using 2SLS regression DiD estimation exploit the exogenous variations in FIO generated by inclusion MSCI membership passage JGTRRA. These results suggest investors play an important monitoring role mitigating agency conflicts shareholders managers. Overall, this paper lends support dynamic trade-off theory.
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ژورنال
عنوان ژورنال: Journal of Corporate Finance
سال: 2021
ISSN: ['0929-1199', '1872-6313']
DOI: https://doi.org/10.1016/j.jcorpfin.2021.101966