Organizational structure, ownership structure and credit ratings: Evidence from SMEs
Author's Department
Management Department
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https://doi.org/10.22495/cocv11i3p4
Document Type
Research Article
Publication Title
Corporate Ownership and Control
Publication Date
1-1-2014
doi
10.22495/cocv11i3p4
Abstract
This paper documents that credit ratings of closed corporations depend on their organizational structure and ownership structure (family management and family control). Using the data from the Survey of Small Business Finance (SSBF), we show that S-Corporations have higher credit ratings than C-Corporations. We argue that lower information asymmetries inherent in S-Corporations lead to better credit ratings. We also show that ownership structure - as explained by family control and family management - is also associated with higher credit ratings. We argue that increased monetary stake of a single entity - family - translates into his altruistic commitment and increased effort, thereby improving credit ratings.
First Page
63
Last Page
71
Recommended Citation
APA Citation
Ahmed, N.
Farooq, O.
&
Bouaddi, M.
(2014). Organizational structure, ownership structure and credit ratings: Evidence from SMEs. Corporate Ownership and Control, 11(3), 63–71.
10.22495/cocv11i3p4
https://fount.aucegypt.edu/faculty_journal_articles/1826
MLA Citation
Ahmed, Neveen, et al.
"Organizational structure, ownership structure and credit ratings: Evidence from SMEs." Corporate Ownership and Control, vol. 11,no. 3, 2014, pp. 63–71.
https://fount.aucegypt.edu/faculty_journal_articles/1826