TITLE:
The Effect of Ownership Structure on the Yield Spread of Corporate Bonds
AUTHORS:
Marcio Lorencini Ferreira, Michele Nascimento Jucá, Ricardo Goulart Serra
KEYWORDS:
Yield Spread, Corporate Bonds, Family Firms, Institutional Investors
JOURNAL NAME:
Theoretical Economics Letters,
Vol.10 No.4,
August
24,
2020
ABSTRACT: In the recent recession scenario in Brazil, the
credit market experienced shortages, reinforcing the search for alternative
sources of credit by companies, such as the issuance of corporate bonds. Among
the aspects that may influence the yield spread of companies is the presence of
family firms and institutional investors in their ownership structure.
Therefore, this study aims at verifying whether the participation of family
firms and institutional investors—in the ownership structure of companies—has
an impact on the yield spread of their bonds. To verify this impact, this study
analyzes 171 companies that carried out 385 bond issuances, from 2010 to 2018.
The effects of ownership structure are tested by descriptive statistics,
correlation analysis and multiple cross section regression with pooled data.
The result shows that the greater the participation of institutional investors
in the companies’ ownership structure, the lower the yield spread of their
bonds.