Corporate governance and leverage: Evidence from a natural experiment

Authors
Publication date 2010
Series Tinbergen Institue discussion paper, TI 2010-019/2
Number of pages 18
Publisher Amsterdam: Tinbergen Institute
Organisations
  • Faculty of Economics and Business (FEB) - Amsterdam Business School Research Institute (ABS-RI)
Abstract We argue that the recent corporate governance reform in the Netherlands provides a natural experiment to explore the impact of changes in corporate governance on financing policy. We find that, relative to a control sample of comparable firms outside the Netherlands, Dutch firms significantly reduced their leverage following the passage of the reform. Our findings are consistent with the view that corporate governance improvements reduce the value of debt as a disciplining device.
Document type Report
Language English
Published at http://www.tinbergen.nl/ti-publications/discussion-papers.php/discussion-papers.php?paper=1568
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