Capital Structure Premium in Multinational SOEs: Evidence from China |
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| Authors: | Rui Zhang Xun Zhang |
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| Affiliation: | 1. National School of Development, Peking University, Beijing, China;2. Beijing Normal University, Beijing, China;3. Shanghai Finance Institute, Shanghai, China |
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| Abstract: | We investigate the relationship among multinational operations, ownership and capital structure using data from China's A‐share listed companies. We find that, in general, multinational enterprises (MNEs) have lower leverages than domestic enterprises (DEs). More importantly, we document a capital structure premium in China's multinational state‐owned enterprises (SOEs). Since the state supports multinational SOEs that promote overseas national strategy, these multinational SOEs will have higher credit availability and therefore higher debt–equity ratios. This study sheds light on the Chinese government's impact on firm's creditability. |
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