Ownership concentration, financial policies and agency costs in a an emerging country

Abstract

The purpose of this paper is to analyze the relationships between debts, dividends and ownership concentration. Are these mechanisms substitutable or complementary?

We propose a three simultaneous equations system for two samples of Tunisian firms (31 quoted companies 73 non quoted private firms) during the period 2005-2013. The results show that these relationships are not same for the quoted firms as for non quoted ones. We find that the debts and the ownership concentration are substitutable. We observed this relation between the ownership concentration level and dividends. In the quoted companies, the debts and dividends are complementary. They are substitutable in the non quoted firms. In the private firms, the ownership concentration level affects the financial policies.

Key Words:  control mechanism, debts, dividend, ownership structure.

JEL Classification:  G32, G34