Effects of Internationalization on Ownership Structure: Evidence from Latin American Firms
We analyze the direct and simultaneous effects of internationalization on the ownership structure of Latin American companies based on agency theory. Using a sample of 425 Latin American firms between 2007 and 2011, which corresponds to 1,776 observations, we use random effects and three-stage l...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Associação Nacional de Pós-Graduação e Pesquisa em Administração (ANPAD)
2014-07-01
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| Series: | BAR: Brazilian Administration Review |
| Subjects: | |
| Online Access: | http://www.anpad.org.br/periodicos/arq_pdf/a_1478.pdf |
| Summary: | We analyze the direct and simultaneous effects of internationalization on the ownership structure of Latin
American companies based on agency theory. Using a sample of 425 Latin American firms between 2007 and
2011, which corresponds to 1,776 observations, we use random effects and three-stage least squares panel data
regression to test these effects. We find that the hypothesized positive effect of internationalization on ownership
concentration is rejected. Our results support the negative relationship that is predicted by principal-agent theory
when analyzing the effect of ownership on the degree of internationalization. Greater internationalization via the
equity entry mode is associated with lower levels of ownership concentration. Finally, there is simultaneity in the
determination of the relationship between the degree of internationalization and ownership concentration. |
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| ISSN: | 1807-7692 1807-7692 |