Does investor base affect the firm-level ex-ante cost of equity capital?

IF 1.7 Q3 MANAGEMENT

IIMB Management Review Pub Date : 2024-06-01 DOI:10.1016/j.iimb.2024.04.003

Jains P Chacko , Lakshmi Padmakumari

引用次数: 0

Abstract

This research investigates how investor base affects the cost of equity capital (COE) in Indian companies, particularly in market conditions with weak investor protection and increased ownership concentration by promoters and families. Using ordinary least squares (OLS), panel fixed effects, and two-step system generalised method of moments (GMM) analysis on data spanning from 2016 to 2021, we discovered that a dispersed ownership structure is linked to a higher ex-ante COE. Our findings indicate that companies with dispersed shareholders have less motivation to monitor managers, which leads to the expropriation of minority shareholders and results in higher COE.

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投资者基础是否会影响公司层面的事前股权资本成本？

本研究调查了投资者基础如何影响印度公司的股权资本成本（COE），尤其是在投资者保护薄弱、发起人和家族所有权集中度提高的市场条件下。利用普通最小二乘法（OLS）、面板固定效应和两步系统广义矩法（GMM）分析 2016 年至 2021 年的数据，我们发现分散的所有权结构与较高的事前 COE 有关。我们的研究结果表明，股东分散的公司监督管理者的积极性较低，这会导致小股东被征用，从而导致更高的 COE。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

IIMB Management Review MANAGEMENT-

CiteScore

3.20

自引率

5.90%

发文量

审稿时长

68 days

期刊介绍： IIMB Management Review (IMR) is a quarterly journal brought out by the Indian Institute of Management Bangalore. Addressed to management practitioners, researchers and academics, IMR aims to engage rigorously with practices, concepts and ideas in the field of management, with an emphasis on providing managerial insights, in a reader friendly format. To this end IMR invites manuscripts that provide novel managerial insights in any of the core business functions. The manuscript should be rigorous, that is, the findings should be supported by either empirical data or a well-justified theoretical model, and well written. While these two requirements are necessary for acceptance, they do not guarantee acceptance. The sole criterion for publication is contribution to the extant management literature.Although all manuscripts are welcome, our special emphasis is on papers that focus on emerging economies throughout the world. Such papers may either improve our understanding of markets in such economies through novel analyses or build models by taking into account the special characteristics of such economies to provide guidance to managers.