Ownership Structure and Growth Opportunities as Determinants of Bank Debt: Evidence from Chilean Companies

Authors :: Eleuterio Vallelado González
Paolo Saona Hoffmann
Source :: Management Research: Journal of the Iberoamerican Academy of Management. 3:121-136
Publication Year :: 2005
Publisher :: Emerald, 2005.
Abstract: Our aim is to analyze the type of lender and the debt maturity of Chilean firms as a function of their ownership structure and their growth opportunities. We perform the empirical analysis using an unbalanced panel data of 169 firms from 1990 to 2001. Our results show that Chilean firms with growth opportunities, ownership concentration, and a need for external funds issue short‐term bank debt to finance their new investments. This financing source is an efficient mechanism in Chile to alleviate agency and asymmetric information problems. The Chilean institutional environment influences firms’ decisions on banking debt.

Subjects :: Finance
business.industry
Strategy and Management
media_common.quotation_subject
Debt-to-GDP ratio
Financial system
External debt
Information asymmetry
Debt
Agency (sociology)
Internal debt
Business and International Management
Debt levels and flows
business
media_common
Panel data

ISSN :: 15365433
Volume :: 3
Database :: OpenAIRE
Journal :: Management Research: Journal of the Iberoamerican Academy of Management
Accession number :: edsair.doi...........02e8927308b3bfb00c2cf58da6c89c52
Full Text :: https://doi.org/10.1108/15365430580001317

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