Purpose – The paper aims to focus on a well-known topic in the financial literature: the relation betweencapital structure and firm value. The controversial empirical results on this topic can be attributable to alack of attention to the interaction between capital structure and other corporate governance variables.In fact, capital structure represents a corporate governance device that can preserve corporategovernance efficiency and protect its ability to create value.Design/methodology/approach – The paper, after a synthetic review of the main literature, defines,with a descriptive model, a theoretical approach that can contribute in clearing up the relation betweencapital structure, corporate governance and value. It provides a research proposition, and somesuggestions, that should be applied for future empirical research on this topic while it also promotes amore precise design for empirical analysis.Findings – The debate on the relation between capital structure and a firm’s value needs to take directlyinto account the role of moderation and/or mediation of the corporate governance. It is necessary toconsider the presence of complementarity between capital structure and other corporate governancevariables such as: ownership concentration; managerial ownership; the role of the board of directors;and so on.Research limitations/implications – This paper promotes, as an aim for future research, a verificationof the validity of this model through application of the analysis to a wide sample of firms.Originality/value – The paper tried to suggest how to improve previous controversial analysis on thistopic.
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|Titolo:||The influence of corporate governance on the relation between capital structure and value|
LA ROCCA, Maurizio (Corresponding)
|Data di pubblicazione:||2007|
|Appare nelle tipologie:||1.1 Articolo in rivista|