Pyramid firms have more debt

Controlling shareholders in pyramid firms, a structure where an ultimate owner uses indirect ownership to maintain control over a large group of companies, use debt to secure their private benefits, new research from the Bank of Canada posits.

The research looks at firms where the ultimate owner owns enough shares to control a firm and this firm, in turn, owns enough shares to control another firm, and so on, allowing the ultimate owner to control all the firms, even the ones in which he has no