The Role of Multiple Large Shareholders in the Choice of Debt Source

Sabri Boubaker, Wael Rouatbi, Walid Saffar

Research output: Journal article publicationJournal articleAcademic researchpeer-review

39 Citations (Scopus)


This paper examines the effect of multiple large shareholders (MLS) on debt choice. Using a sample of 654 French-listed firms over the period 1998-2013, we find that reliance on bank debt increases with the presence and voting power of MLS. This result is robust to endogeneity concerns and to several sensitivity tests. Moreover, we find that the effect of MLS on debt choice is more pronounced when agency problems between controlling and minority shareholders are more severe. Taken together, our results suggest that MLS reduce the controlling owner's incentive to avoid bank monitoring, leading to greater reliance on bank debt.
Original languageEnglish
Pages (from-to)241-274
Number of pages34
JournalFinancial Management
Issue number1
Publication statusPublished - 1 Mar 2017

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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