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Is debt a governance device against the control leverage ? The case of European firms

ContributorsGaud, Philippe
Collection
  • Cahiers de recherche; 2005.06
Publication date2005
Abstract

This paper documents that there is no relationship between ultimate ownership structure and firm performance among non-financial listed firms in Europe. The use of the control leverage by some ultimate owners is value destroying however. We show that firms rely on debt to counterbalance this effect because they face market pressures. These results are obtained from a large sample that allows to carry out a simultaneous equation system estimation of firm performance and financial structures where these variables are treated as endogenous.

Keywords
  • Ownership structure
  • Corporate governance
  • Capital structure
  • Separation of ownership and control
Citation (ISO format)
GAUD, Philippe. Is debt a governance device against the control leverage ? The case of European firms. 2005
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accessLevelPublic
Identifiers
  • PID : unige:5758
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