Nonlinear impacts of board independence on debt financing: Contingent on the shareholdings of the largest shareholder

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dc.contributor.authorKweh, Qian Long
dc.contributor.authorTing, Irene Wei Kiong
dc.contributor.authorLe, Hanh Thi My
dc.contributor.authorNourani, Mohammad
dc.date.accessioned2020-08-26T08:36:27Z
dc.date.available2020-08-26T08:36:27Z
dc.date.copyright© 2020
dc.date.issued2021-04
dc.descriptionThis article is not available at CUD collection. The version of scholarly record of this article paper is published in International Journal of Finance & Economics (2021), available online at: https://doi.org/10.1002/ijfe.1907en_US
dc.description.abstractShareholder interest is unprotected until and unless precise financial decision making is in place. Although literature supports the independent directors' monitoring function in a decision-making process, for a controversial debt financing issue, the influence of the largest shareholders may hinder such an action. This study aims to delineate the association between board independence and debt financing when the largest shareholders are likely to play a significant role between them. With a sample of Vietnamese listed companies from 2007 to 2016, our regression analyses show that a nonlinear U-shaped relationship between level of board independence and debt financing is stronger among the largest shareholders with a high level of shareholdings in their shareholding group than the full sample. This finding implies the determining influence of the largest shareholders with a high level of shareholdings in a company. However, this association is not found in companies with a low level of shareholdings by the largest shareholders. Results reveal that the largest shareholders have the incentive to influence the decision making of independent directors about debt financing when their shareholdings are high. Specifically, issuing more debt to raise capital for business reduces the risk of the largest shareholders losing their controlling rights. The results are further supported by several robustness checks and controlling for economic events such as the global financial crisis and ASEAN Economic Community. © 2020 John Wiley & Sons, Ltd.en_US
dc.description.sponsorshipFoundation of Science and Technology Development of Ton Duc Thang Universityen_US
dc.identifier.citationKweh, Q. L., Ting, I. W. K., Le, H. T. M., & Nourani, M. (2021). Nonlinear impacts of board independence on debt financing: Contingent on the shareholdings of the largest shareholder. International Journal of Finance & Economics, 26(2), 2289-2306. https://doi.org/10.1002/ijfe.1907en_US
dc.identifier.issn10769307
dc.identifier.urihttps://doi.org/10.1002/ijfe.1907
dc.identifier.urihttp://hdl.handle.net/20.500.12519/232
dc.language.isoenen_US
dc.publisherJohn Wiley and Sons Ltden_US
dc.relationAuthors Affiliations : Kweh, Q.L., Faculty of Management, Canadian University Dubai, Dubai, United Arab Emirates; Ting, I.W.K., Faculty of Industrial Management, Universiti Malaysia Pahang, Gambang, Malaysia; Le, H.T.M., Benchmarking Research Group, Faculty of Accounting, Ton Duc Thang University, Ho Chi Minh City, Viet Nam; Nourani, M., School of Management, Universiti Sains Malaysia, Penang, Malaysia
dc.relation.ispartofseriesInternational Journal of Finance & Economics;
dc.rightsLicense to reuse the abstract has been secured from John Wiley and Sons and Copyright Clearance Center.
dc.rights.holderCopyright © 2020 John Wiley & Sons, Ltd.
dc.rights.licenseLicense Number: 5372310902367 License date: Aug 19, 2022
dc.rights.urihttps://s100.copyright.com/CustomerAdmin/PLF.jsp?ref=53f1c54c-1936-47d1-9b4a-47a386515166
dc.subjectAudit Committeeen_US
dc.subjectCorporate Governanceen_US
dc.subjectBoard Independenceen_US
dc.subjectboard independenceen_US
dc.subjectdebt financingen_US
dc.subjectlargest shareholdersen_US
dc.subjectnonlinearityen_US
dc.subjectVietnamen_US
dc.titleNonlinear impacts of board independence on debt financing: Contingent on the shareholdings of the largest shareholderen_US
dc.typeArticleen_US

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