TY  - JOUR
AB  - Purpose– This paper examines relationship between bargaining powers of creditors as well as employees and financial leverage across countries. The purpose of this paper is to explore roles of creditors and employees in capital structure decisions under different legal and political regimes across countries.Design/methodology/approach– Using country‐level creditor rights index and labor rights index as a proxy for bargaining powers of creditors and employees, respectively, the author addresses the interaction between creditors as well as employees and shareholders. The paper tests the impact of employee rights and creditor rights on capital structure across countries.Findings– The author finds a positive relationship between employee rights and firms' use of debt and a negative relationship between creditor rights and firm debt ratio.Social implications– The paper provides a new perspective to interpret international variation in financial leverage in the world. The results obtained from this paper help us to understand financial leverage in different countries with various corporate governance mechanisms.Originality/value– This paper takes all stakeholders into account when studying agency problems; it explores the role of creditors and employees in financing decision making under various corporate governance patterns and political and legal systems across countries.
VL  - 38
IS  - 3
SN  - 0307-4358
DO  - 10.1108/03074351211201433
UR  - https://doi.org/10.1108/03074351211201433
AU  - Yu Bing
ED  - Susana Yu
PY  - 2012
Y1  - 2012/01/01
TI  - Agency costs of stakeholders and capital structure: international evidence
T2  - Managerial Finance
PB  - Emerald Group Publishing Limited
SP  - 303
EP  - 324
Y2  - 2024/04/16
ER  -