Spheres of Influence: Exploring the impact of different ownership structures on the cost of debt
(2024) BUSN79 20241Department of Business Administration
- Abstract
- Title: Spheres of Influence - Exploring the impact of different ownership structures on the cost of debt.
Purpose: The purpose of this study is to investigate whether sphere ownership influences the cost of debt for Swedish firms, and if the effect can be explained by different types of sphere ownership, such as family, institutional, or bank-affiliated spheres.
Methodology: To investigate the relationship between sphere ownership and the cost of debt, both pooled ordinary least squares and random effect models are employed. The models all include time dummies, industry dummies, and robust standard errors clustered by firm. To control the robustness and examine if the results suffer from self-selection bias, the paper further employs... (More) - Title: Spheres of Influence - Exploring the impact of different ownership structures on the cost of debt.
Purpose: The purpose of this study is to investigate whether sphere ownership influences the cost of debt for Swedish firms, and if the effect can be explained by different types of sphere ownership, such as family, institutional, or bank-affiliated spheres.
Methodology: To investigate the relationship between sphere ownership and the cost of debt, both pooled ordinary least squares and random effect models are employed. The models all include time dummies, industry dummies, and robust standard errors clustered by firm. To control the robustness and examine if the results suffer from self-selection bias, the paper further employs different ownership thresholds and a propensity score matching approach.
Theoretical perspective: Theoretical perspectives used in this study to formulate the hypotheses and explain our results are the agency theory and stewardship theory.
Empirical foundation: The sample employed in this study consists of 1,772 firm-year observations of 305 firms listed on the Stockholm Stock Exchange over the time period 2015-2023.
Conclusions: We find that firms owned by spheres and family spheres exhibit 120 and 130 basis points lower costs of debt, respectively. These results are attributable to the fact that spheres, and especially family spheres, help to mitigate agency problems by acting as stewards of the firms they control. However, we find no evidence that firms owned by institutional or bank-affiliated spheres see their cost of debt affected. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9165447
- author
- Eriksson Asamoah, Gabriel LU and Larsson, Johan LU
- supervisor
-
- Diem Nguyen LU
- organization
- course
- BUSN79 20241
- year
- 2024
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Sphere ownership, cost of debt, concentrated ownership, agency costs, stewardship
- language
- English
- id
- 9165447
- date added to LUP
- 2024-06-22 23:23:02
- date last changed
- 2024-06-22 23:23:02
@misc{9165447,
abstract = {{Title: Spheres of Influence - Exploring the impact of different ownership structures on the cost of debt.
Purpose: The purpose of this study is to investigate whether sphere ownership influences the cost of debt for Swedish firms, and if the effect can be explained by different types of sphere ownership, such as family, institutional, or bank-affiliated spheres.
Methodology: To investigate the relationship between sphere ownership and the cost of debt, both pooled ordinary least squares and random effect models are employed. The models all include time dummies, industry dummies, and robust standard errors clustered by firm. To control the robustness and examine if the results suffer from self-selection bias, the paper further employs different ownership thresholds and a propensity score matching approach.
Theoretical perspective: Theoretical perspectives used in this study to formulate the hypotheses and explain our results are the agency theory and stewardship theory.
Empirical foundation: The sample employed in this study consists of 1,772 firm-year observations of 305 firms listed on the Stockholm Stock Exchange over the time period 2015-2023.
Conclusions: We find that firms owned by spheres and family spheres exhibit 120 and 130 basis points lower costs of debt, respectively. These results are attributable to the fact that spheres, and especially family spheres, help to mitigate agency problems by acting as stewards of the firms they control. However, we find no evidence that firms owned by institutional or bank-affiliated spheres see their cost of debt affected.}},
author = {{Eriksson Asamoah, Gabriel and Larsson, Johan}},
language = {{eng}},
note = {{Student Paper}},
title = {{Spheres of Influence: Exploring the impact of different ownership structures on the cost of debt}},
year = {{2024}},
}