Private benefits of control and financial leverage: Evidence from Russia and Northern Europe

Abstract

Master thesis is devoted to the issue of relation between private benefits of control and financial leverage of a company. The research focuses on Russian and Nordic companies. In the course of the research for both of the regions were obtained statistically significant regression models of financial leverage. The main finding of the research is rejecting the hypothesis concerning existence of negative relation between financial leverage and private benefits of control. Besides theoretical contribution, this finding has practical implications: the companies aiming to borrow do not have to signal the quality of their corporate governance. From the policy point of view it is important that private benefits of control do not cause suboptimal decision making regarding the capital structure.