Using A-share listed companies in China from 2007 to 2022 as samples,this study empirically examines the relationship between non-controlling blockholders(hereafter NCB)and corporate leverage.The study finds that NCB significantly reduce corporate leverage,primarily by curbing the probability and extent of excessive debt.The study explores the mechanisms and pathways of influence,finding that NCB primarily participate in governance through exit threat rather than active voice mechanisms,and they mainly influence leverage decisions by reducing equity financing costs and improving profitability.Further analysis shows that institutional NCB have a stronger impact on corporate leverage decisions and its heterogeneity have different impacts;Compared with long-term or operating leverage,NCB reduce short-term and financial leverage to a greater extent.Compared with state-owned enterprises,NCB play a stronger role in promoting corporate deleveraging in non-state-owned enterprises.This paper enriches the research on the influencing factors of corporate leverage decisions from the perspective of NCB and also provides references for setting reasonable leverage ranges and governance.
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