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The Effect of a Complex Ownership Structure and Judicial Efficiency on Leverage: Evidence from Pakistani Listed Companies

Author

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  • Muhammad Hashim Shah
  • Xiao Zuoping
  • Abdullah
  • Muhammad Kashif Shah

Abstract

We explore the impact of complex ownership structure and judicial efficiency on firm leverage at Pakistani pyramid firms. Ratio of controlling to ownership rights is much higher at Pakistani firms than in other economies, which motivates us to study its impact on leverage. Our results reveal that complex internal structure at Pakistani pyramid firms is positively related to leverage. We find that the presence of efficient courts weaken the impact of complex ownership structure on leverage at pyramid firms. Contrary to the literature, we find that the political connections of pyramid firms in Pakistan are not related to corporate leverage.

Suggested Citation

  • Muhammad Hashim Shah & Xiao Zuoping & Abdullah & Muhammad Kashif Shah, 2018. "The Effect of a Complex Ownership Structure and Judicial Efficiency on Leverage: Evidence from Pakistani Listed Companies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(10), pages 2258-2277, August.
    • Handle: RePEc:mes:emfitr:v:54:y:2018:i:10:p:2258-2277
    DOI: 10.1080/1540496X.2018.1469404
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    Cited by:

    1. Shah, Muhammad Hashim & Xiao, Zuoping & Abdullah,, 2023. "Internal pyramid structure, judicial efficiency, firm-level governance and dividend policy," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 764-785.
    2. Shah, Muhammad Hashim & Xiao, Zuoping & Abdullah, & Quresh, Shakir & Ahmad, Mushtaq, 2020. "Internal pyramid structure, contract enforcement, minority investor protection, and firms’ performance: Evidence from emerging economies," Research in International Business and Finance, Elsevier, vol. 52(C).
    3. Ruqia Shaikh & Zhiqiang Li & Xiaoli Wang & Muhammad Rizwan Nazir, 2022. "Firm innovation and ultimate control mechanism: Case of emerging market," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 440-456, March.

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