{"title":"The impact of economic policy uncertainty on capital structure decisions: Does institutional ownership characteristics matter?","authors":"","doi":"10.1057/s41310-024-00230-x","DOIUrl":null,"url":null,"abstract":"<h3>Abstract</h3> <p>This paper aims, first, to investigate the effect of EPU and institutional ownership characteristics on capital structure decisions and, second, to examine the role of institutional investors characteristics during the periods of uncertainty. Based on a sample of 2100 firm-year observations from the French non-financial companies over the period of 2006–2019, this study uses panel data regressions, two stage least squares and propensity score matching. We find that firms tend to lower their leverage ratios when policy uncertainty increases. Furthermore, we show that capital structure decisions depend on institutional ownership characteristics. Our results, also, indicate that the presence of active investors, such as long-term institutional ownership and institutional common ownership, helps to mitigate the financing frictions in uncertainty periods.</p>","PeriodicalId":45050,"journal":{"name":"International Journal of Disclosure and Governance","volume":"4 1","pages":""},"PeriodicalIF":2.9000,"publicationDate":"2024-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Disclosure and Governance","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1057/s41310-024-00230-x","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0
Abstract
This paper aims, first, to investigate the effect of EPU and institutional ownership characteristics on capital structure decisions and, second, to examine the role of institutional investors characteristics during the periods of uncertainty. Based on a sample of 2100 firm-year observations from the French non-financial companies over the period of 2006–2019, this study uses panel data regressions, two stage least squares and propensity score matching. We find that firms tend to lower their leverage ratios when policy uncertainty increases. Furthermore, we show that capital structure decisions depend on institutional ownership characteristics. Our results, also, indicate that the presence of active investors, such as long-term institutional ownership and institutional common ownership, helps to mitigate the financing frictions in uncertainty periods.
期刊介绍：
The International Journal of Disclosure and Governance publishes a balance between academic and practitioner perspectives in law and accounting on subjects related to corporate governance and disclosure. In its emphasis on practical issues, it is the only such journal in these fields. All rigorous and thoughtful conceptual papers are encouraged.
To date, International Journal of Disclosure and Governance has published articles by a former general counsel and a former commissioner of the SEC, practitioners from Cleary Gottlieb, Skadden Arps, Wachtell Lipton, and Latham & Watkins as well as articles by academics from Harvard, Yale and NYU. The readership of the journal includes lawyers, accountants, and corporate directors and managers.
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