Capital Structure, Rates of Return and Financing Corporate Growth: Comparing Developed and Emerging Markets, 1994-00

ESRC Centre for Business Research, ESRC Centre for Business Research - Working Papers 01/2003; DOI: 10.2139/ssrn.397001
Source: RePEc

ABSTRACT This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.

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    ABSTRACT: We examine countries in continental Europe to further refine the distinction between ability to control and actual control and whether a particular distinct shareholder distribution relates to company performance. As an extension to the existing literature, we provide a more nuanced taxonomy of controlling shareholder systems in different countries. In particular, we (1) operationalize the definition of “dominant” owner, to make this measure less sensitive to the disparity of voting and cash flow rights and (2) empirically test the active power of the dominant owners by investigating whether the economic performance of the firms from different countries is consistently affected by the nature of the company’s dominant owner. After disaggregating the overall sample by specific ownership type and by country, we find statistical support for the relationship between dominant ownership and performance being strongly positive for firms in which banks and families/individuals are dominant owners to being inversely related (p ≤ 0.1) when corporations are the dominant owners. Additional analysis discloses an even more complicated picture, suggesting that countries are not homogenous in terms of their ownership landscapes, and, hence, their effects on performance.
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    ABSTRACT: Purpose – This paper aims to examine how unlisted companies in Ghana finance their growth and to what extent do they rely on internal finance relative to external sources of finance. Additionally, the paper seeks to investigate the determinants of the capital structure of unlisted companies in Ghana. Design/methodology/approach – The paper uses the Singh-Hamid methodology as well as panel data techniques to evaluate the financing decisions of unlisted companies in Ghana. Findings – The analysis shows that unlisted firms in Ghana finance most of their growth from external debt and they are also characterized by shorter debt maturity. The results also show that the dominant factors affecting the debt equity ratios of unlisted firms in Ghana are size, firm growth, tangibility, profit margin, and financial development. Research limitations/implications – Overall, the evidence in this paper suggests that standard models of corporate finance can be applicable to unlisted companies in Ghana. Practical implications – Informative when planning for future development of the small business sector of the Ghanaian economy. Originality/value – Provides empirical evidence on how unlisted companies in Ghana finance their growth and what determines their capital structure.
    Management Research Review 01/2011; 34(2):172-185.

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