Impact of ownership concentration on leverage with family ownership as mediating and firm life cycle as moderating variables: Evidence from family firms in Pakistan

Abstract

The research work is conducted to examine the impact of ownership concentration on leverage in the evidence of Pakistan’s non-financial firms. We have checked the mediation effect of family ownership on the above relation and moderating impact of firm life cycle. Ownership concentration is a substantial internal mechanism in which the firm’s management is controlled by its owners in order to safeguard their interest. Debt is used as a monitoring device. It monitors & kept managers to line up their interest with shareholders aims. This study promotes the growing literature on family businesses financial decision making. Data was collected from the non-financial listed companies of Pakistan for this study. And the evidence proved that ownership concentration, firm age and family ownership plays significant role in firms financing decisions.