Capital Structure Premium in Multinational SOEs: Evidence from China

摘要

We investigate the relationship among multinational operations, ownership and capital structure using data from China's A-share listed companies. We find that, in general, multinational enterprises (MNEs) have lower leverages than domestic enterprises (DEs). More importantly, we document a capital structure premium in China's multinational state-owned enterprises (SOEs). Since the state supports multinational SOEs that promote overseas national strategy, these multinational SOEs will have higher credit availability and therefore higher debt-equity ratios. This study sheds light on the Chinese government's impact on firm's creditability.