Effects of Internationalization on Ownership Structure: Evidence from Latin American Firms

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Author(s):	Hsia Hua Sheng ^[1] ; Vinícius Silva Pereira ^[2] Total Authors: 2
Affiliation:	^[1] Fundação Getúlio Vargas - Brasil ^[2] FAGEN/UFU - Brasil Total Affiliations: 2
Document type:	Journal article
Source:	BAR, Braz. Adm. Rev.; v. 11, n. 3, p. 323-339, 2014-09-00.
Abstract
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. (AU)

FAPESP's process:	12/12302-9 - Internationalization and its effects on financing strategies for Latin American multinationals
Grantee:	Hsia Hua Sheng
Support Opportunities:	Regular Research Grants