The Influence of Capital Concentration on Brazilian Non-Financial Public Companies’ Indebtedness Behavior

Abstract

One of the main financial policies is related to the capital structure to be defined by the companies. For this reason, studies related to factors determining the capital structure have a high priority on the research agenda in finance area. This being so, the proposal is to investigate whether the nature of the company’s shareholding control—family, foreign, state-owned—affects its capital structure. It is the first work that uses real shareholding control. For the development of this research, the publicly traded Brazilian companies listed in B3 are adopted as a sample. The analyzed sample covers 128 Brazilian companies listed in B3, between 2010 and 2017, excluding companies from the financial sector. It is necessary to study each company report to discover last—and true—shareholding control (Reference Forms). To verify the influence of the capital structure, regression models with panel data are used (fixed effect and robustness). The results are consistent with the expected ones: 1) the excessive concentration of family capital impairs indebtedness, which, due to the control loss aversion, reduces the financing by debt; 2) the concentration of foreign capital favors companies’ indebtedness, as they have more efficient management, better access to financing sources and better investment opportunities, and, 3) the concentration of state capital favors indebtedness, since these companies are of government’s interest to maximize the country’s development, and have low capital costs arising from development banks.