Ownership Structure on Capital Structure: Relation and Effect

The relationship between ownership structure and capital structure has been established theoretically, whereas only a few empirical studies have examined this linkage. However, the previous studies have often concentrated on managerial ownership, insider ownership, institutional ownership, or ownership concentration. There is limited empirical evidence on the influence of foreign and state ownership on capital structure, although these kinds of ownership have recently become important in developing economies because of a sharp increase in foreign and state investment. In this book, a study is applied to investigate the effect of ownership on capital structure in Egypt. The study uses panel data from all non-financial listed firms in Egyptian exchange during the period 2012–2017. The findings of the study imply that firms with different ownership type may not be equal with respect to access to capital sources. This study supports the argument that one of the greatest concerns of managers is to retain or increase their control because it provides them with discretion in making decisions or accessing their private benefits.