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Private Property Rights and Capital Structure: Empirical Evidence from the 2004 Constitutional Amendment in China

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The right to private property was first written into the Constitution of the People's Republic of China in March 2004. We take advantage of the 2004 amendment and use a difference-in-differences approach to empirically test the causal impact of private property rights security on capital structure. Employing the Chinese Industrial Enterprises Database from 2000 to 2007 to implement the analysis, we conclude that private property rights security has a negative impact on leverage. We argue that our conclusion is not China-specific, but a general lesson for modern finance theory and is portable to developed countries. (JEL: G, K, O, P)
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Document Type: Research Article

Publication date: 01 September 2017

This article was made available online on 18 November 2016 as a Fast Track article with title: "Private Property Rights and Capital Structure: Empirical Evidence from the 2004 Constitutional Amendment in China".

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  • Founded as Zeitschrift für die gesamte Staatswissenschaft in 1844.

    As one of the oldest journals in the field of political economy, the Journal of Institutional and Theoretical Economics (JITE) deals traditionally with the problems of economics, social policy, and their legal framework. JITE is listed in the Journal of Economic Literature, the Social Science Citation Index, the International Bibliography of the Social Sciences, and COREJ.

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    From 2013 on all accepted articles are published in an Online First version (in their final layout) to make them searchable and citable by their DOI immediately after peer review and acceptance. Once the article is published in an issue of the journal, the Online First version will be removed.

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