ساختار مالکیت شرکت و انتخاب بین بدهی بانک ها و بدهی های عمومی

This article examines the relation between a borrowing firm's ownership structure and its choice of debt source using a novel data set on corporate ownership, control, and debt structures for 9,831 firms in 20 countries from 2001 to 2010. We find that the divergence between the control rights and cash-flow rights of a borrowing firm's largest ultimate owner has a significant negative impact on the firm's reliance on bank debt financing. In addition, we show that the control-ownership divergence affects other aspects of debt structure including debt maturity and security. Our results indicate that firms controlled by large shareholders with excess control rights may choose public debt financing over bank debt as a way of avoiding scrutiny and insulating themselves from bank monitoring.

Why do some firms borrow mainly from arm's-length investors such as public bondholders while others rely much more on informed financial intermediaries such as banks as their debt providers? This is an important question as both bank loans and public bonds are major sources of global corporate financing.1 Existing corporate theories provide various explanations for the benefits and costs of using bank debt versus public debt (e.g., Diamond, 1984, Diamond, 1991, Fama, 1985, Rajan, 1992 and Park, 2000). Yet, despite the theoretical and empirical importance of credit markets, there is only limited evidence on the determinants of the choice between private and public debt financing. For instance, using a panel data set of 250 publicly listed firms in the U.S., Houston and James (1996) investigate the relation between a firm's growth opportunities and its mix of private and public debt claims. More recently, Denis and Mihov (2003) examine the link between a firm's credit quality and its choice of debt source. Most of the existing studies focus on firms in the U.S. and explore firm financial characteristics as potential factors influencing firms’ debt choices. In this paper, we focus on the ownership structure of borrowing firms. Specifically, we explore the effect of the divergence between ownership and control on debt choice using a unique, hand-collected international panel data set that covers more than 9,800 firms in 20 countries from 2001 to 2010. Existing theories on ownership structure and corporate debt financing choice offer different views on the relation between firm control-ownership divergence and the choice between bank debt and public debt. On the one hand, compared to public debt holders, banks have significant comparative advantages in monitoring efficiency due to access to private information as insiders (Fama, 1985). Superior access to information enables banks to detect expropriation or opportunistic activities by controlling shareholders and corporate insiders and, accordingly, to punish the offending borrowers either by liquidation or through renegotiation (Park, 2000). As a consequence, bank monitoring reduces moral hazard problems and provides borrowers strong incentives to make appropriate corporate decisions (Stiglitz and Weiss, 1983 and Rajan, 1992). In contrast, the diffuse ownership of public debt and the resulting free rider problems weaken individual bondholders’ incentives to engage in costly monitoring (Diamond, 1984 and Diamond, 1991). Even if many bondholders were willing to monitor, the monitoring itself would be inefficient as it would involve wasteful duplication of monitoring efforts and costs (Houston and James, 1996). In short, the combination of concentrated holdings, credible threats, and superior access to information makes banks much more effective monitors than public bondholders in deterring potential self-interested or self-dealing activities.2 Therefore, controlling shareholders and corporate insiders are less likely to be able to extract private benefits at the expense of other shareholders under bank monitoring (Hoshi, Kashyap, and Scharfstein, 1993). From this perspective, firms with greater monitoring needs (e.g., those with greater agency problems) should borrow privately from banks while firms with lower monitoring needs should borrow more from arm's-length public investors (Houston and James, 1996 and Denis and Mihov, 2003). Since the divergence between ownership and control induces significant agency problems between large shareholders and other investors (e.g., Shleifer and Vishny, 1997), it follows that there should be a positive relation between corporate control-ownership divergence and the borrowing firm's reliance on bank debt.3 On the other hand, controlling shareholders’ incentives to engage in expropriation activities and elude monitoring may imply the opposite relationship between the control-ownership divergence and firm debt choice. The literature on corporate ownership structure documents widespread divergences between the control and cash-flow rights of dominant shareholders. These divergences arise from the use of pyramid ownership structures, multiple control chains, and dual-class shares in many public firms around the world (e.g., La Porta et al., 1999, Claessens et al., 2000, Laeven and Levine, 2008 and Lin et al., 2011). In such firms, the high control rights enable the controlling shareholders to engage in various self-dealing activities to divert corporate resources for private benefits while the low cash-flow rights expose the controlling shareholders to very limited direct financial costs of such activities (Shleifer and Vishny, 1997 and Johnson et al., 2000).4 Consequently, the tunneling incentives in these firms increase with the wedge between control rights and cash-flow rights. Tunneling activities by controlling shareholders heighten the risk of financial distress and default, impair collateral value, and increase expected bankruptcy costs. Taking these agency costs into account, banks are more likely to impose particularly strong monitoring on borrowing firms with large divergences between ownership and control.5 In anticipation of the strict monitoring by banks, firms controlled by large shareholders with excess control rights might prefer public debt financing over bank debt as a way of avoiding scrutiny and insulating themselves from bank monitoring. These considerations, therefore, suggest a negative relation between corporate control-ownership divergence and a borrowing firm's reliance on bank debt. The overall effect of the borrowing firm's control-ownership divergence on its choice between bank debt and public debt is an empirical question that we explore in this paper. To investigate this, we construct a new, hand-collected large data set on corporate ownership structure and debt structure for more than 9,800 publicly listed firms across 20 East Asian and West European countries during the period 2001–2010.6 Using this large international data set, we find strong evidence that is consistent with the bank monitoring avoidance hypothesis. Our results indicate that firms with wider divergences between controlling shareholders’ voting rights and cash-flow rights tend to rely more heavily on public debt financing and less on bank debt financing. The effect is not only statistically significant but also economically significant. A one-standard-deviation increase in the difference between the control rights and cash-flow rights of the largest ultimate owner of the borrowing firm, or the control-ownership wedge, reduces the firm's reliance on bank debt financing (measured by the ratio of bank debt to total debt) by 16 percentage points, ceteris paribus. This is an economically significant effect given the sample average bank debt to total debt ratio of 71%. Consistently, an increase in the control-ownership wedge significantly increases the firm's reliance on public debt financing. Our baseline results support the argument that firms controlled by large shareholders with excess control rights choose public debt financing over bank debt as a way of avoiding bank scrutiny and monitoring. We further test the monitoring avoidance hypothesis by investigating whether the relation between the control-ownership wedge and debt choice is influenced by factors that affect controlling shareholders’ incentives to evade monitoring. The negative effect of the control-ownership divergence on borrowing firms’ reliance on bank debt (i.e., the monitoring avoidance effect) should be particularly strong in situations where the control-ownership divergence is more likely to result in intensive bank monitoring. Moreover, the effect should also be enhanced in the presence of factors that increase dominant shareholders’ tunneling incentives and, as a result, their incentives to avoid bank monitoring. Specifically, we examine five factors: firm financial distress risk, information opacity, family ownership, the presence of multiple large shareholders, and the strength of shareholder rights. We find that firms with high financial distress risk and firms with high degrees of information opacity tend to rely more on bank debt financing. These effects are consistent with the major advantages of bank debt financing over public debt financing highlighted in the existing literature. These advantages include renegotiation efficiency and re-contracting flexibility during financial distress, low-cost information production, and the ability to price claims that are hard for public investors to value in firms with high levels of information asymmetry (e.g., Ramakrishnan and Thakor, 1984, Gilson et al., 1990, Thakor and Wilson, 1995 and Hadlock and James, 2002). More important, we find that firm financial distress risk and information opacity strengthen the negative relation between the control-ownership wedge and bank debt reliance. Since financial distress risk and information opacity raise controlling shareholders’ tunneling incentives and at the same time increase the expected monitoring from banks (e.g., Campello et al., 2011 and Lin et al., 2012), controlling shareholders’ incentives to elude monitoring also increase. This results in a more pronounced effect of control-ownership divergence on debt choice. To state this differently, the presence of control-ownership divergence weakens the positive links between financial risk and bank debt reliance and between information opacity and bank debt reliance because of controlling shareholders’ sharpened incentives to avoid bank scrutiny. With respect to ownership identity, tunneling incentives are likely to be particularly strong when a firm's controlling shareholder is an individual or a family because the private benefits of control are not diluted among many unrelated investors (Villalonga and Amit, 2006). Consequently, family-controlled firms may have heightened incentives to avoid bank monitoring. Consistent with the monitoring avoidance hypothesis, we find that the effect of control-ownership divergence on firm debt choice is larger for family-controlled firms. In contrast, we find that the relation between control-ownership divergence and debt choice is weakened by the presence of multiple large shareholders and in countries with strong shareholder rights. Having other large owners and strong shareholder rights reduces the tunneling incentives of the controlling shareholder (e.g., Maury and Pajuste, 2005, La Porta et al., 1998 and Djankov et al., 2008). As a result, the controlling shareholder's incentive to avoid bank monitoring is also reduced, resulting in a lesser impact of the control-ownership wedge on bank debt reliance. We conduct a battery of ancillary tests to rule out alternative explanations and verify the robustness of our results. While our results are consistent with dominant shareholders avoiding bank monitoring due to their tunneling incentives, controlling shareholders may also have incentives to prop up a financially distressed firm using transfers from other firms under their control in order to preserve their options to expropriate profits of this specific firm in the future (e.g., Friedman, Johnson, and Mitton, 2003). In such cases, firms with controlling shareholders might also find bank debt less attractive because the benefits of bank debt financing during financial distress such as renegotiation efficiency and re-contracting flexibility (e.g., Gilson et al., 1990 and Denis and Mihov, 2003) become less valuable. We therefore control for a borrowing firm's potential of being propped up and test the robustness of our main results. Specifically, we construct measures of a borrowing firm's propping potential based on the value of the assets of all firms that are positioned underneath the firm in the ownership chain and could potentially be used to prop it up (Lin, Ma, Malatesta, and Xuan, 2011).7 Our main findings remain economically and statistically significant after controlling for borrowing firms’ propping potentials. We also repeat the baseline regressions in the subsample of firms likely to have little or no potential of being propped up (i.e., firms at the bottom of the ownership chain) and find highly robust results. In addition, we exclude firms with no controlling shareholders and focus only on firms that have controlling shareholders to explore whether the control-ownership divergence still has any explanatory power for debt choice in this subsample of firms that are all subject to potential propping. We continue to find that the control-ownership wedge exerts a significant and negative impact on firms’ bank debt reliance. In another set of tests, we investigate whether the level of existing bank debt in a firm's debt structure affects the relation between control-ownership divergence and debt choice. While an increase in financial stake and thus credit exposure in the borrowing firm enhances banks’ incentives to exert effort in due diligence and monitoring (Sufi, 2007), it is possible that for firms with high levels of bank debt, the change in bank monitoring may not be very sensitive to the change in the control-ownership wedge because these firms are already subject to strict bank monitoring. Consequently, the effect of control-ownership divergence on debt choice may be less pronounced when bank debt accumulates to a certain level beyond which banks’ incremental monitoring incentives get smaller. Indeed, we find that the link between the control-ownership wedge and bank debt reliance weakens for firms with high levels of bank debt. Another issue that we address concerns the possibility that some unobserved or omitted factor may drive both a firm's ownership structure and its debt choice, thus biasing our findings. We employ several different methods to address this potential concern. First, we include country and industry fixed effects as well as year interaction (e.g., country×year) fixed effects in our regressions to control for time-invariant and time-varying factors that may affect both ownership structure and debt choice. Second, we perform change regressions to explore the effect of a change in a firm's ownership structure on the change in the firm's debt choice. Examining changes helps to control for time-invariant omitted factors that might be driving the results. Third, we test the robustness of our results using instrumental variable analyses. The empirical results from all of these additional tests are highly robust. We find that a firm's ownership structure continues to significantly influence its debt choice after accounting for the potential issue of endogeneity. In addition to debt source, we also explore the impact of control-ownership divergence on other aspects of debt structure such as debt maturity and security. The tunneling and monitoring avoidance incentives of the controlling shareholders might also affect debt maturity and security for two reasons. First, short-maturity debt increases monitoring intensity since the borrowing firm is subject to more frequent scrutiny by creditors, underwriters, and rating agencies at issuance or renewal (Stulz, 2000 and Datta et al., 2005). Similarly, having collateral increases creditors’ monitoring incentives. This is because collateral enables creditors to garner higher returns from monitoring when the borrowing firm is in distress (Rajan and Winton, 1995 and Park, 2000). In anticipation of the intensive monitoring induced by short maturity and high security requirements, firms controlled by large shareholders with tunneling incentives would prefer to insulate themselves by choosing a debt structure with long maturity and low levels of collateralization (Datta, Iskandar-Datta, and Raman, 2005). Second, as has been widely shown in the literature, bank debt on average has a much shorter maturity (e.g., Tufano, 1993, Stohs and Mauer, 1996, Johnson, 1997 and Park, 2000) and is more often secured by collateral (e.g., Gilson and Warner, 2000) than public debt. Given our main finding that firms with wider control-ownership divergence tend to rely more on public debt and less on bank debt, we would also expect the control-ownership wedge to be positively related to debt maturity and negatively related to debt security. Our empirical results are highly consistent with our expectations. We find that the control-ownership divergence significantly affects borrowing firms’ debt maturity and security: firms with larger control-ownership wedges tend to have debt with longer maturities and lower levels of collateralization. Our paper contributes to several strands of literature. The primary contribution to the debt choice literature is to show that the control-ownership divergence has a first-order effect on a borrowing firm's debt structure.8 To our knowledge, ours is the first paper to report evidence on this effect. Taken together, our findings show that the monitoring avoidance incentives caused by the control-ownership divergence play an important role in determining firm debt choice. Our paper also contributes to the ownership structure literature (e.g., La Porta et al., 1999, Claessens et al., 2000 and Lin et al., 2011) by presenting a new insight on how elements of corporate ownership structure exacerbate large shareholders’ moral hazard problems, influence firm financial decisions, and shape corporate policies. In addition, the paper adds to the law and finance literature (e.g., La Porta et al., 1998 and Djankov et al., 2008) by showing how law and institutions mitigate the impact of controlling shareholders’ tunneling incentives on debt financing decisions. The remainder of the paper proceeds as follows. We discuss the sample construction process and variable definitions in Section 2. Section 3 presents the empirical results from the baseline regressions, the robustness checks, and the finer tests focusing on the interaction between ownership structure and various other factors. We conclude the paper in Section 4.

There is rich empirical evidence suggesting that the divergence between ownership and control creates strong incentives for large shareholders to engage in tunneling and other moral hazard activities. Yet little is known about how such incentives and activities induced by dominant shareholders’ excess control rights affect firm financing behavior. The aim of this paper is to enhance our knowledge of these matters by examining the choice of debt source by firms with control-ownership divergences. Compared to public bondholders, banks can serve as more effective monitors in deterring potential self-dealing activities because of their concentrated holdings, strong bargaining power, and superior access to information. As a consequence, firms controlled by large shareholders with excess control rights and hence strong tunneling incentives may prefer public debt financing over bank debt as a way to evade scrutiny and insulate themselves from bank monitoring. Our paper examines this bank monitoring avoidance hypothesis using a novel, hand-collected data set on corporate ownership, control, and debt structures for 9,831 firms in 20 countries from 2001 to 2010. We find strong evidence that the monitoring avoidance incentives induced by the separation of ownership and control exert a significant impact on the choice between bank debt and public debt. Specifically, we find that the divergence between the control rights and cash-flow rights of a borrowing firm's controlling shareholder decreases its reliance on bank debt financing and increases its reliance on public debt financing significantly. These effects are particularly pronounced for family-controlled firms, informationally opaque firms, and firms with high financial distress risk, and are weakened by the presence of multiple large owners and strong shareholder rights. We also find that the control-ownership divergence of a borrowing firm's dominant shareholder increases the firm's debt maturity and decreases its debt collateralization significantly. Collectively, our results identify ownership structure as an important determinant of firm debt structure and shed new light on a channel through which the control-ownership divergence and the ensuing moral hazard incentives influence firm financial decisions.