دانلود رایگان مقاله سن شرکت، حاکمیت شرکتی و انتخاب ساختار سرمایه

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.

6. Conclusion

Prior research has considered the idea that as a firm grows older many of its features change, and collectively these influence a number of aspects of its behavior. For example, some argue that as a firm grows older and converts its growth options into asset-in-place that it will lever up. Another stream of literature, however, argues that as a firm ages, the influence of its governance structure on its behavior also changes. Thus, we ask whether the effects of corporate governance on corporate debt use choices change as a public firm ages.

In order to address this question, we must also address several specification errors in prior capital structure research. First, consistent with Welch’s (2007, 2011) critiques, ensure that our capital structure measure implies that an increase in debt financing is associated with a decrease in equity financing, and vice versa. Second, we address Welch’s other critique that book value measures of equity are plug values in financial accounting and so do not represent firm’s choices. Third, we explicitly address Papke and Wooldridge’s (1992) critique of regressions on fractional or proportional random variables. This critique also implies that prior endogeneity tests using linear models for these data are invalid. Fourth, we address Cook, Kieschnick, and McCullough (2008) and Ramalho and Vidigal da Silva (2009) critique of empirical capital structure models that ignore the selection issue implied by all equity firms. Fifth, we address endogeneity in nonlinear capital structure models using control function methods – which prior evidence suggests are less biased than two state prediction methods (e.g., 2SLS, etc.).

Using data on a sample of U.S. corporations from 1996 through 2016, we derive the following key conclusions. First, firm age, without considering its interaction with different corporate governance features, is negatively correlated with a firm’s use of debt conditional on its using debt financing. This result contrasts with prior arguments and evidence on the relationship between firm age and it use of financial leverage.