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Creditor protection, shareholder protection, and cost of debt financing around the world

Author

Listed:
  • Thi Huong Dao

    (Thuyloi University, Ha Noi, Vietnam)

  • Quoc Trung Tran
  • Thi Mai Nguyen
  • Tran Sy Nguyen

Abstract

Debt financing plays an important role in corporate financial decisions. Therefore, the cost of debt is an interesting topic in corporate finance. Using a sample of 153,784 observations across 30 countries from 2003 to 2016, we find that creditor rights positively affect the cost of debt. In addition, the effect of shareholder rights is weaker in countries with stronger creditor protection. JEL Classification: G32, G34

Suggested Citation

  • Thi Huong Dao & Quoc Trung Tran & Thi Mai Nguyen & Tran Sy Nguyen, 2023. "Creditor protection, shareholder protection, and cost of debt financing around the world," Australian Journal of Management, Australian School of Business, vol. 48(1), pages 90-107, February.
    • Handle: RePEc:sae:ausman:v:48:y:2023:i:1:p:90-107
    DOI: 10.1177/03128962221083375
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    More about this item

    Keywords

    Cost of debt; creditor protection; debt financing; shareholder protection;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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