Ownership concentration and share issue: Evidence from Latin America
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Abstract
This paper aims to identify the effect of ownership concentration on share issuance of Latin American firms. For a sample of 887 firms, the results indicate that ownership concentration hinders share issuance in Latin America. Profitability also curbs share issuance, indicating a pecking order behavior. Firm size favors firms’ ability to issue shares. We also find that firms with more growth opportunities tend to issue more shares, which suggests a possible depletion of available cash flow and less capability to contract debt. Additionally, the availability of assets to guarantee loans hampers share issuance, signaling that firms with tangible assets seem to prefer debt rather than share issuance. Finally, this work contributes to the debate on capital structure, specifically about share issuance, by providing additional evidence on Latin American firms.
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Long Paper
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