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Corporate governance structure and debt levels - Using Korean firms

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  • Corporate governance structure and debt levels - Using Korean firms
  • Lew, Sung Hee
  • Dankook University


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Title Corporate governance structure and debt levels - Using Korean firms
Similar Titles
Material Type Reports
Author(English)

Lew, Sung Hee

Publisher

[Seoul, South Korea]:Dankook University

Date 2015-09
Pages 23
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Economy < Economic Administration
Holding SSRN

Abstract

In this paper, we investigate the influence of corporate governance structure on firms’ debt ratios, using three different governance proxies, the portion of stocks held by the largest shareholders and their family members(PLS), the portion of an outside director over total board member(POD), and the portions of stocks held by foreigner(PFO). We find that PLS and POD do not show a clear association with debt levels, and many of the coefficients of them are not statistically significant. However, PFO shows a clear negative association with debt levels over estimators. We also find that high levels of governance proxies cause firms to adjust their debt levels faster: and high level of PLS has the strongest effect upon firms’ debt level shifts. With this result, we suggest the importance of strong managerial-ownership. (The rest omitted)