Ownership Structure and Growth Opportunities as Determinants of Bank Debt: Evidence from Chilean Companies

Ownership Structure and Growth Opportunities as Determinants of Bank Debt: Evidence from Chilean... Our aim is to analyze the type of lender and the debt maturity of Chilean firms as a function of their ownership structure and their growth opportunities. We perform the empirical analysis using an unbalanced panel data of 169 firms from 1990 to 2001. Our results show that Chilean firms with growth opportunities, ownership concentration, and a need for external funds issue short‐term bank debt to finance their new investments. This financing source is an efficient mechanism in Chile to alleviate agency and asymmetric information problems. The Chilean institutional environment influences firms’ decisions on banking debt. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Research: The Journal of the Iberoamerican Academy of Management Emerald Publishing

Ownership Structure and Growth Opportunities as Determinants of Bank Debt: Evidence from Chilean Companies

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Publisher
Emerald Publishing
Copyright
Copyright © 2005 Emerald Group Publishing Limited. All rights reserved.
ISSN
1536-5433
DOI
10.1108/15365430580001317
Publisher site
See Article on Publisher Site

Abstract

Our aim is to analyze the type of lender and the debt maturity of Chilean firms as a function of their ownership structure and their growth opportunities. We perform the empirical analysis using an unbalanced panel data of 169 firms from 1990 to 2001. Our results show that Chilean firms with growth opportunities, ownership concentration, and a need for external funds issue short‐term bank debt to finance their new investments. This financing source is an efficient mechanism in Chile to alleviate agency and asymmetric information problems. The Chilean institutional environment influences firms’ decisions on banking debt.

Journal

Management Research: The Journal of the Iberoamerican Academy of ManagementEmerald Publishing

Published: Jul 1, 2005

Keywords: Lending; Debt; Chile; Ownership structure; Growth

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