Abstract:

Relative to firms in a number of emerging countries, Moroccan firms are undercapitalized. The purpose of this study is to provide a clear understanding of blockholders’ incentives to equity investment,. The paper uses a dataset covering listed manufacturing firms over the period 2002–2011 and investigates both short-term and medium-term increases in the number of blockholders. Our analysis reveals the existence of a negative relationship between the number of additional blockholders  and both ownership concentration and risk. Hence, blockholders are less tempted to enter firms’ stocks However, For short-term debt, size does not appear to matter. The impact of growth is positive on short-term leverage and irrelevant for long-term leverage. Finally, profitability exerts a positive effect on long-term leverage and a negative one on short-term leverage.