CORPORATE CONTROL AND CAPITAL STRUCTURE DECISIONS CONSIDERING UNOBSERVED HETEROGENEITY

摘要

This study analyzes the relation between firms' corporate governance structure and capital structure choice. Different methodologies are applied: ordinary least squares regressions with time-effects (OLS), OLS with both time and industry effects and panel data techniques. The results suggest that unobserved heterogeneity does have an influence and consequently, coefficients obtained when using a panel data approach are more reliable than the ones obtained using pooled data. For large levels of managerial ownership, increases in this variable lead to higher debt levels, while large boards favor managerial entrenchment, leading to lower levels of leverage.