Abstract：

We develop and test an ownership structure pecking order. Our ownership pecking order sorts out which structures are likely to have relatively fewer agency costs versus higher agency costs. At the top of the pecking order are firms with a single controlling shareholder, they have the lowest agency costs when that shareholder is not the government. Next is the presence of multiple large shareholders. They are even more effective when the large shareholders are of the same type. The structure with the highest agency costs consists of a single large non-controlling shareholder. Our empirical tests confirm this pecking order.