Abstract
One of the main financial policies is related to the capital structure to be defined by the companies. For this reason, studies related to factors determining the capital structure have a high priority on the research agenda in finance area. This being so, the proposal is to investigate whether the nature of the company’s shareholding control—family, foreign, state-owned—affects its capital structure. It is the first work that uses real shareholding control. For the development of this research, the publicly traded Brazilian companies listed in B3 are adopted as a sample. The analyzed sample covers 128 Brazilian companies listed in B3, between 2010 and 2017, excluding companies from the financial sector. It is necessary to study each company report to discover last—and true—shareholding control (Reference Forms). To verify the influence of the capital structure, regression models with panel data are used (fixed effect and robustness). The results are consistent with the expected ones: 1) the excessive concentration of family capital impairs indebtedness, which, due to the control loss aversion, reduces the financing by debt; 2) the concentration of foreign capital favors companies’ indebtedness, as they have more efficient management, better access to financing sources and better investment opportunities, and, 3) the concentration of state capital favors indebtedness, since these companies are of government’s interest to maximize the country’s development, and have low capital costs arising from development banks.
Highlights
The results are consistent with the expected ones: 1) the excessive concentration of family capital impairs indebtedness, which, due to the control loss aversion, reduces the financing by debt; 2) the concentration of foreign capital favors companies’ indebtedness, as they have more efficient management, better access to financing sources and better investment opportunities, and, 3) the concentration of state capital favors indebtedness, since these companies are of government’s interest to maximize the country’s development, and have low capital costs arising from development banks
There is the guiding question of this research: what is the influence of the type of capital concentration—family, foreign capital and governmental—on the Brazilian public companies’ indebtedness? the objective of this research is to identify whether the Brazilian public companies’ capital structure is influenced by the characteristic of the capital structure
To answer the research question, the general purpose of this research is: to analyze the ownership and control structures of publicly traded companies in Brazil, between 2010 and 2017, based on data compiled in company reports provided to CVM (Securities and Exchange Commission) called Reference Forms (RF), which have been used since their implementation
Summary
The core objective of this work was to present the shareholding pulverization of large American companies and the divergences of interests between managers and shareholders. The authors observed that the pulverization, empirically studied, would increase the managers’ power, since they could make decisions benefiting themselves and disregarding the shareholders. From the ownership point of view, the capital structure is partially determined by the objectives of those who are in the company’s control and, if the company has a concentrated structure, it tends to have fewer agency problems. The agency problem is around the minority controllers and shareholders (Jensen & Meckling, 1976). According to La Porta et al (2000), in countries where the owners’ rights are weakly protected, the control of voting shares has enormous value, for it provides the controllers with the opportunity to expropriate the other agents
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