The Impact of Ownership Structure on Debt Financing of Japanese Firms with the Agency Cost of Free Cash Flow

Download or read book The Impact of Ownership Structure on Debt Financing of Japanese Firms with the Agency Cost of Free Cash Flow written by Lingling Wu and published by . This book was released on 2004 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper, using 833 observations of listed Japanese firms between the years 1992 to 2000, explore the implications of the free cash flow hypothesis concerning the disciplinary role of ownership structure in corporate capital structure policy. The results show (1) the sensitivity of ownership structure to leverage depends on growth opportunities and free cash flow. (2) Keiretsu classification affects relations between ownership structure and leverage. Overall, the results generally support the free cash flow hypothesis.