Capital Structure: New Evidence from the Ownership Structure*

Abstract

[EN] This paper provides theory and empirical evidence supporting a comple-mentary perspective on capital structure based on corporate ownershipstructure. According to our ownership view, capital structure is partlydetermined by the incentives and the goals of those who are in control of thefirm. Our results strongly support this view. As a consequence of managerialentrenchment and rent expropriation phenomena, self-interested agents(entrenched managers and controlling owners) chose the capital structuremost appropriate for their own best interest. Additionally, we find evidenceof an interaction effect between managerial ownership and ownershipconcentration, in particular, the larger debt increments promoted by outsideowners when managers are entrenched.