Does state ownership really matter for capital structure in selected G-20 economies?

• Main Authors: Muhammad Yusuf Amin, Mustafa Besim, Zahoor Ul Haq
• Format: Article
• Language: English
• Published: Taylor & Francis Group 2019-01-01
• Series: Ekonomska Istraživanja
• Subjects: state-owned enterprises; income level; capital structure; tangibility; size; tobin’s q; profitability
• Online Access: http://dx.doi.org/10.1080/1331677X.2019.1661000
• ISSN: 1331-677X; 1848-9664

The effect of state ownership on the capital structure decisions of enterprises in selected G-20 countries is estimated using financial and accounting data of 252 state-owned and 6503 non-state-owned firms for the period 2011–2015. The results indicate that state ownership is positively associated with leverage in all the selected G-20 countries. However, this phenomenon changed when countries were considered according to their income levels because state-owned enterprises in high-income countries carry more debt, while the opposite is true for lower-middle-income countries. The results were also divergent when the effects of various firm-specific variables were compared between state and non-state-owned enterprises across the development spectrum.