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Based on the agency theory, the purpose of this paper is to theoretically argue and empirically investigate how ownership structure impacts the capital structure of the listed mid‐cap companies in India and whether the capital structure as exogenous variable has a role in determining ownership structure as well.

Simultaneity between capital structure and ownership structure is checked through Hausman specification test on endogeneity. Fixed effect panel regression model is used to analyze five years of data (2005‐2009) on the sample units, to find the relation between leverage and ownership structure after controlling for profitability, risk, tangibility, growth and size.

Empirical results on Indian firms suggest that the ownership structure does impact capital structure but not the vice versa. Consistent with theoretical prediction empirical results reveal that the leverage is positively related to concentrated shareholding and has a negative relation with diffuseness of shareholding after controlling for profitability, risk, tangibility, growth and size. The findings are consistent with “managerial entrenchment hypothesis” and “pecking order theory” of capital structure.

The findings of the paper will enable the practitioners and analysts to understand as to why, in the bank and financial institution‐dominated debt financing system in India, leverage is closely associated with concentrated ownership pattern and why retained earning is a preferred vehicle of financing for the firms with diffused shareholding.

The results of the study enrich the literature on capital structure, agency cost and corporate governance issues in several ways.

This study aims to evaluate the impact of firm, industry level determinants and ownership concentration on the dynamic capital structure decision in Indonesia and analyses the governing theories.

This study uses the dynamic panel model of generalized method of moments-System (one-step and two-step) by using a panel data from 2000 to 2014 to examine the relationship between the determinants and leverage. The results are robust to the various definitions of leverage, heterogeneity, autocorrelation, multicollinearity and endogeneity concern.

Growing firms and firms operating in a highly concentrated industry use high level of debt, taking advantage of the tax shield (trade-off theory). However, if the firms are operating in a highly dynamic environment, they take on less debt as to avoid bankruptcy risk. Firms in Indonesia opt for debt financing perhaps to act as a controlling mechanism to mitigate agency conflicts that may exist between the large controlling shareholders and the minority. Aged and highly profitable firms with high tangible and intangible assets and liquidity level operating in a high dynamic environment follow the pecking order theory.

This study does not perform each industry regression individually. All the industries are pooled together, as the main focus of this study is to examine the factors affecting leverage of firms in general without giving particular attention to individual industry.

The insights on the impact of ownership concentration and industry characteristics are novel especially on Indonesia, thus fill the gap in the literature.

The purpose of this paper is to use a panel of New Zealand unlisted firms from 1998 to 2009 to examine the relationship between ownership structure and firm leverage ratios. Although, the choice of the debt in capital structure is important for all firms, the scale effects may influence the degree of influence of particular financial theories upon capital structure.

To control the endogeneity effect of insider ownership, this study uses the dynamic panel generalised method of moment estimation and uses the Granger causality test to check the causality effect of leverage and insider ownership.

The findings suggest an inverse U-shape relationship of insider ownership and leverage, indicating higher insider ownership increases management entrenchment while lower insider ownership increases misalignment of the interests of management and owners. Moreover, this study finds bi-directional causation between insider ownership and firm leverage ratios.

Finance policy needs to vary across firm type, industries and firm characteristics and should match the different borrowing requirements of small business.

This paper contributes to literature by investigating whether the structure of equity ownership can impact cross-sectional variations in capital structure. Moreover, most of the capital structure research has been conducted in large markets like USA and publicly listed firms but this paper concentrates on the evidence from New Zealand unlisted businesses. Also, the econometric analysis is more robust due to controlling for the endogeneity effect of insider ownership.

The purpose of this paper is to investigate the determinants of capital structure using a cross-section sample of 1,481 non-financial firms listed on the Chinese stock exchanges in 2011.

Employing four leverage measures (total leverage and long-term leverage in terms of both book value and market value, respectively) this study examines the effects of factors with proven influences on capital structure in literature, along with industry effect and ownership effect.

The authors find that large firms favour debt financing while profitable firms rely more on internal capital accumulation. Intangibility and business risk increase the level of debt financing but tax has little impact on capital structure. The authors also observe strong industrial effect and ownership effect. Real estate firms borrow considerably more and firms from utility and manufacturing industries use more long-term debt despite compared with commercial firms. On the other hand, firms with state ownership tend to borrow more, while firms with foreign ownership choose more equity financing.

The study uses cross-section data to avoid any potential time effects, which allows the authors to focus on their main research question – to identify the determinants of capital structure for Chinese firms. Future research may gain more insights using panel data and considering other factors such as crisis and financial reforms.

These results may provide important implications to investors in making investment decision and to firms in making financing decisions.

This paper uses by far the largest and latest cross-section sample from the Chinese stock markets, offering a more complete picture of the financing behaviours in the Chinese firms, with known characters and the impact of ownerships.

The primary aim of this paper is to investigate the nature, degree and direction of the effects of certain classes of corporate ownership on capital structure decisions among firms.

Using a sample of 71 quoted companies in Nigeria, the study adopts panel fixed effects regression models to estimate the relationship between financial leverage and corporate ownership, while controlling for some firm‐specific characteristics like profitability, firm size and firm age.

The study finds that discrimination between indigenous and foreign firms is a major determinant of financial leverage in Nigeria; and that the consistency of empirical results and capital structure theories across countries depends much on the dominant nature of corporate ownership structure.

An attempt to widely generalize the results of this study may be challenged by its relatively small sample. With data from just a sample of 71 firms, the robustness of the country‐, time‐ and company‐ effects may not have been fully captured in the estimation process.

The paper provides necessary platforms, especially to corporate managers, for aligning financing decisions and ownership structure to other structural characteristics such as size, age, and profitability.

The study is unique because it examines ownership effects on leverage using selected ownership classes; and because it focuses on an economy with harsh corporate operating environment and constrained capital market condition..

The aim of this empirical study is to investigate whether corporate governance attributes such as board size, outside directors, ownership concentration, managerial ownership, director remuneration, and CEO duality affect capital structure choices of Pakistani firms.

Multiple regression analysis is used to estimate the relationship between corporate governance measures and capital structure of non‐financial firms listed on the Karachi Stock Exchange, Pakistan, during 2004‐2008.

The results suggest that board size, outside directors, and ownership concentration are positively related to the total debt ratio and the long‐term debt ratio, whereas director remuneration is negatively related. Managerial ownership is negatively related to the long‐term debt ratio. CEO duality is found to be highly insignificant in all regressions. Control variables such as profitability and liquidity are negatively related to the total debt ratio and the long‐term debt ratio, whereas firm size is positively related. Asset tangibility is positively related to the long‐term debt ratio and negatively related to the total debt ratio. Although Pakistani firms have weak internal and external corporate governance mechanisms compared to firms in developed countries, the empirical findings suggest that corporate governance attributes in part explicate the financing behavior of Pakistani firms.

The empirical results of this study provide support to corporate managers in establishing an optimal capital structure, and to regulatory authorities for enacting laws and developing institutional support to make corporate governance mechanisms work more effectively in the country.

This research contributes to the literature by illuminating the significant links between some corporate governance measures and capital structure choices of firms in Pakistan.

The purpose of this paper is to examine the effects of internal corporate governance mechanisms on the capital structure decisions of Chinese-listed firms.

Using a large and more recent data set consisting of 2,386 Chinese-listed firms over the period from 1998 to 2012, the authors use different statistical methods (OLS, fixed effects and system GMM) to analyse the effects of firm-specific and corporate governance influences on capital structure.

The authors find that the proportion of independent directors and ownership concentration exert significant influence on the level of Chinese long-term debt ratios after controlling for firm-specific determinants and split share reforms. Further analysis separating the sample of this paper into state-owned enterprises (SOEs) and privately owned enterprises (POEs) suggests that ownership concentration in the hands of the state leads to decrease in debt ratios.

The finding implies that concentrated ownership in the hands of the state appears more efficient compared to their private counterparts in their monitoring role.

This paper extends prior literature, which has concentrated disproportionately on firm-specific influences on capital structure, to the effects of within-firm governance mechanisms on capital structure decisions. The paper contributes to the agency theory–capital structure discourse in an emerging country context where corporate governance system appears weak.

This study aims to analyze the impact of corporate governance on firms’ external financing decisions in the Middle East and North Africa (MENA) region.

The authors analyzed a unique set of panel data comprising 2,425 nonfinancial firms whose shares are traded on stock exchanges in countries in the MENA region. The authors fitted an ordinary least squares model to estimate the regression coefficients. The authors performed a sensitivity analysis using alternative measures of the critical variables and an endogeneity analysis using instrumental variable methods with plausible external instruments.

The results revealed that corporate governance characteristics of firms are strongly associated with their degree of leverage. They also showed that macrofinancial conditions, financial regulations, corporate governance enforcement and social conditions mitigate the impact of corporate governance on firms’ financing decisions.

A larger sample size will further improve the results; however, this is difficult and depends on the extent to which increasing disclosure practices allow more corporate information to reach international databases.

This study provides new evidence on the role of corporate governance on firms’ financing decisions and documents the essential mitigating role of institutions, alerting managers to consider them.

This study is a novel attempt. Based on information from different data sources, this study explored the predictive power of corporate governance, ownership structures and other firm-specific characteristics in explaining corporate leverage in MENA countries. Overall, the analysis provides new evidence of the association between corporate governance and capital structure in the MENA region, highlighting the critical role of institutions.

The purpose of this paper is to assess and explain the leverage of Saudi companies (53 companies) during the period 2003‐2007.

This paper reviews two different classical capital structure theories, namely tradeoff theory and pecking order theory, to formulate testable propositions concerning the determinants of debt levels of Saudi companies. It develops a number of regression models (pooled OLS and panel techniques) to test the study's hypotheses.

The results suggest that a firm's capital structure is positively affected by profitability, size, growth opportunities, and institutional ownership. It is negatively impacted by tangibility, government ownership, family ownership, business risk, dividend payment, and liquidity.

Cost of capital is one of the pillars of corporate competitive advantage. Knowing which factors have the potential to influence capital structure can be essential to minimizing the cost of capital.

This is the first study of the determinants of capital structure in Saudi Arabia that considers dividend payment, ownership structure (as a proxy for agency problems), and risk. This work also contributes to the current debate regarding theories of competitive capital structure.

A key issue faced by co-operative enterprises is how to raise external equity capital without compromising member control. The purpose of this study is to examine the potential of a special type of financial instrument called a Cooperative Capital Unit (CCU) introduced into the Australian legislation to facilitate external investment while maintaining member control.

A Delphi panel and six focus groups were used to provide an understanding of the challenges associated with cooperative governance and financing and to aid the development of a conceptual framework for the implementation of CCUs.

The findings from these Delphi panel and six focus groups were used to develop a proposed framework that the authors believe will be useful in structuring equity-like instruments depending on the purposes they might serve. In particular, the authors propose a new form of cooperative ownership and equity structure that could: better align member and investor interests; provide a mechanism to strengthen one role over the other depending on the needs of the cooperative; and provide investors with a better sense of security while retaining member control.

To the best of the authors’ knowledge, the cooperative ownership and equity structure proposed in this study are novel and not currently found in theory or practice. The insights provided by this study should, therefore, be of interest to a wide range of stakeholders, including cooperatives; professional advisors to these businesses; government regulators; investors; and researchers.