TY - JOUR AB - Purpose The purpose of this paper is to examine the effect of controlling shareholders’ ownership of firms on the firms’ financial constraints in 22 economies for the 1982-2009 period.Design/methodology/approach The authors employ a generalized method of moments-based instrumental variables estimator to estimate empirical models.Findings It found that the overinvestment propensity of controlling shareholders becomes less severe with an increase in cash-flow rights. It further indicates that a higher deviation between the control rights and cash-flow rights of controlling shareholders lower their overinvestment propensity, thereby lowering the firm’s financial constraints.Originality/value The results suggest that a higher protective legal environment for minority shareholders blocks the entrenchment of controlling shareholders and thus benefitting the firm with slackened financing constraints in the given legal origin. VL - 44 IS - 1 SN - 0307-4358 DO - 10.1108/MF-08-2016-0228 UR - https://doi.org/10.1108/MF-08-2016-0228 AU - Park Jin Ho AU - Park Kwangwoo AU - Ratti Ronald Andrew PY - 2018 Y1 - 2018/01/01 TI - Controlling shareholders and financial constraints around the world T2 - Managerial Finance PB - Emerald Publishing Limited SP - 92 EP - 108 Y2 - 2024/03/29 ER -