Agency conflicts, corporate ownership and capital structure decisions of Indian firms: evidence from new governance laws
研究了印度上市公司所有权结构（如管理层、发起人、政府、外资和机构持股）对财务杠杆的影响，发现不同所有权类型与负债水平显著相关，为新兴市场资本结构决策提供新证据。
Purpose This work examines the impact of corporate ownership along with firm-specific variables on the financial leverage of listed Indian companies in context of agency conflicts and new governance laws. Design/methodology/approach Several panel fixed/random effects econometric equations of financial leverage on variables of corporate ownership (managerial, promoter, state, foreign and institutional ownership) along with a set of control variables (asset tangibility, firm size, growth, liquidity and profitability) were estimated employing 113 listed Indian companies. Dynamic panel SYS-GMM model was also estimated to address endogeneity issues and to check the robustness of empirical results. Findings The findings from this study indicate significant relationship between different ownership structure and selected leverage ratios. Ownership variables like promoter, institutional, managerial and foreign shareholding show a significant inverse association with leverage suggesting that these ownership structures tend to decrease the debt levels of Indian firms. This evidence indicates that these ownership structures exert a substantial influence by monitoring the firm’s managers, thereby mitigating agency problems. The government shareholding is observed to have direct impact on leverage ratios of Indian firms suggesting that state ownership tend to adopt high debt policy as they may lean toward maintaining higher debt levels to mitigate share dilution or uphold their control. Practical implications The main policy implication of this analysis is that due consideration should be given to various corporate share of ownership as a tool of corporate governance arrangement in shaping capital structure decisions of firms which is still a puzzle. Originality/value This paper adds to the current literature by providing fresh insights into agency conflicts and financial leverage for an emerging market like India, particularly following the implementation of new corporate governance regulations under Clause 49 of the Securities and Exchange Board of India and the Companies Act, 2013 as there is dearth of such work.