Capital Structure in Sweden –An Investigation of the Differences between Listed Non Family-Owned Companies and Private Family Business

University essay from Göteborgs universitet/Företagsekonomiska institutionen

Author: David Andrén; Jonna Forsell; [2012-06-25]

Keywords: ;

Abstract: Problemdiscussion:Thechoiceofcapitalstructureanditsdependenciesonownershipandotherdeterminantshasbeendiscussedintensivelyforacoupleofdecades.Manyopinionsconcerningthesubjecthavebeenraisedinseveraldirectionsandmanyvariableshavebeenconsideredtohaveanimpactoncapitalstructure.Sincefamilybusinessmakeupforalargeshareoftheworldeconomy,itisinterestingtostudywhetherownershiphasaneffectonleveragelevels.Myers(1984)presentedtwoofthelargesttheoriesregardingcapitalstructure:thestatictrade-­‐offtheoryandthepeckingordertheory,butnoneofthesepointsoutownershipstructureasanimportantvariablewhendeterminingcapitalstructure.Contradictory,thethirdofthemajortheories,agencytheory,statesthatfamilybusinesseswillhavelessdebtsincenoneoronlyasmallagencycostwillexist(Jensen,Meckling,1976).StudiesmadeonforeignmarkethavesupportedtheagencytheoryPurpose:SincemostpreviousresearchismadeoutsideoftheSwedishmarket,thepurposeofthisthesisistoinvestigateandpresentananalysisofthepossiblecorrelationbetweencapitalstructureandownershipstructureinSwedishcompanies.Delimitations:ThisstudyislimitedtobevalidtotheSwedishmarketandtocompaniesthatarelisted,orequalinsizetofirmslisted,ontheSmall-­‐andMid-­‐CapoftheNasdaqOMXStockholmStockExchange.Further,thestudyislimitedtocommentonownership,liquidity,returnonassetsandreturnoncapitalemployedasvariablesthataffectcapitalstructure.Methodology:Withacross-­‐sectionalquantitativestudywehaveresearchedprivatefamilybusinessesandlistednotfamily-­‐ownedfirms.Empiricaldatawascollectedfromannualreportscoveringafive-­‐yearperiodbetween2006and2010andthereafterstatisticaltestingwasperformed.Conclusion:Nostatisticallysignificantdifferenceincapitalstructurecanbefoundbetweenfamily-­‐ownedprivateandnotfamily-­‐ownedlistedfirms.ThisresultisnotinaccordancewithmosttheoriesbutcouldbeexplainedbythefactthatSwedenisabank-­‐orientedeconomy(Lööf,2004).AccordingtoAntoniou,GuneyandPaudyal(2008),thisfactimpliesahighleveragelevelindependentfromownership.Proposalsforfurtherresearch:Sincethestudybehindthisthesiswasnotinlinewithwhatthetheorieswouldsuggest,itbecomesevenmoreinterestingtoinvestigatethefieldfurther.ThereisalackofresearchperformedontheSwedishmarketandtherefore,additionalresearchisneeded.Wesuggestthatbothadditionalquantitativeandqualitativeresearchisperformed.

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