Managers with high ownership more likely to choose private debt
The study looked at how much of a company's stock is owned by its managers and how this affects their choice between private and public debt. They found that higher managerial ownership leads to a preference for private debt, especially bank debt. This means that when managers own more of the company, they are more likely to choose private bank loans over public debt or other types of financing. This research adds to our understanding of how managerial ownership influences the way companies borrow money.