Does minority management affect a firm's capital structure? Evidence from Japan

Abstract

This study evaluates the effect of minority management (MG) on capital structure for a sample of listed Japanese companies over three sectors. We used a dynamic panel, threshold-based model that can control for endogeneity to investigate the linkage between the speed of adjustment of leverage and MG, with the results proving that there is significant linkage between MG and leverage. We also observed that the level of MG has a threshold effect on leverage, such that firms with a high level of MG can reach their optimal leverage faster than those with a low level of MG. 2022