Institutional ownership and cost of debt: evidence from Thailand

This article aims to investigate whether institutional investors aid in lowering the cost of debt using a sample 311 nonfinancial firms listed on Stock Exchange Thailand (SET) over 2011–2020. All data were obtained from SETSMART database. Controlling for firm characteristics, industry effect, and year we analyze link between ownership pooled ordinary least squares fixed effects models find that has negative relationship with both models. The model also shows profitability, growth potential, operating cash flow negatively affect while financial leverage asset tangibility positively debt. Additionally, dynamic GMM indicates connection holdings expenses is significantly negative. Overall, results suggest provide effective oversight decreases conflicts management lenders, ultimately cutting borrowing companies Thailand. In addition, our supplementary analysis suggests must possess sizeable proportion shares (at 23%) actively perform monitoring duties.