سابقه شرکت، حاکمیت شرکتی و انتخاب ساختار سرمایه
Abstract
1. Introduction
2. Sample data and variable definitions
3. Analysis of firm age, corporate governance and capital structure choices
4. Robustness checks
5. Implications of our evidence
6. Conclusion
Appendix 1. Definitions of study variables
References
Abstract
Do the effects of corporate governance on corporate capital structure choices change as a public firm ages? First, we address the direct effects of firm age and governance features on both its decisions to use debt and how much debt to employ. Our analysis reveals a number of novel results. While firm age is positively correlated with the use of debt, it is negatively correlated with how much debt a firm uses. We also find that the effects of firm age on how much debt a firm uses is primarily due to the interaction between firm age and its governance features. The more power that insiders possess, the less debt that the firm uses as it ages. We interpret our evidence as implying that over time, managers allow their risk preferences to dominate their firm capital structure decisions when they are protected from discipline.
Introduction
Prior research suggests that as a firm grows older many of its features change, and collectively these influence a number of aspects of its behavior. In terms of a firm’s capital structure decisions, there are several studies that document how aging firms have more assets-inplace than growth options, and so justifies their taking on more debt (e.g., Hovakimian, Opler and Titman (2001), Sundaresan, Wang and Yang (2015), etc.).1 In a different vein, other research suggests that after going public, the appropriateness of different corporate governance features for aging firms also changes. Filatotchev, Toms and Wright (2006) argue that as firms age (and particularly after their IPO), their governance (board composition) needs to change to reflect its different needs. 2 More recently, Johnson, Karpoff and Yi (2016) argue that the costs and benefits of takeover defenses change as the firm ages. They report evidence that after a firm’s IPO, the costs tend to outweigh the benefits as the firm ages and is reflected in their valuation, especially in firms that employ the most stringent defenses. Both of these studies suggest that the effect of these features on a firm’s capital structure decisions may change as the firm ages as a publicly traded firm.