This paper shows that the domestic controlled companies are more leveraged than the state controlled or than the foreign controlled ones, and that the formers make intensive use of short-term debt. The positive relation between tangible assets and long-term debt is consistent with the trade-off model's prediction. Different from previous evidences, investment opportunities are positively related to leverage, which combines with an inverse relation to profitability to favor the pecking order model against the trade-off model. Finally, and more interestingly, the higher sensitivity of domestic controlled firms' leverage to the analyzed factors seems to indicate that outsiders' rights are less protected by domestic insiders.
