Form of ownership and financial constraints: panel data evidence from leverage and investment equationsFabio Schiantarelli and Alessandro Sembenelli No 1629, Policy Research Working Paper Series from The World Bank Abstract: The authors analyze whether form of ownership affects the substitutability of internal and external sources of finance. In particular, they test whether financial constraints are more severe for independent firms, and whether members of large national business groups suffer different constraints than subsidiaries of foreign multinational corporations. The results for leverage and investment equations estimated for a panel of Italian companies suggest that: a) independent firms face more severe financial constraints than other firms do; and b) members of national groups and subsidiaries of multinational corporations are not oversensitive to cash flow in their investment decisions. But leverage equations suggest interesting differences between the two groups. In particular, agency costs arising from the conflict between managers and shareholders are more important for subsidiaries of multinational corporations. Keywords: Economic Theory&Research; Payment Systems&Infrastructure; Microfinance; International Terrorism&Counterterrorism; Banks&Banking Reform; Economic Theory&Research; International Terrorism&Counterterrorism; Banks&Banking Reform; Small Scale Enterprise; Microfinance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:1629 Access Statistics for this paper More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC. |
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