دانلود رایگان مقاله انگلیسی مدیر عاملان قدرتمند، تامین مالی بدهی و لیزینگ در شرکت های کوچک و متوسط چینی - الزویر 2017

abstract

This study investigates the impacts of CEO power on firm financing policies (i.e. debt financing and operating leasing) using the Caner and Hansen (2004) instrumental variable threshold regressions approach. The sample consists of a panel of 297 Chinese listed small and medium sized enterprises (SMEs) over the period 2009–2012. The empirical results indicate that there are threshold effects in the CEO power-debt relationship and CEO power-operating lease relationship. In particular, we find that firms tend to use more debt financing (and operating leasing) when CEO power index below a certain threshold level; beyond the threshold level, CEO tends to manipulate firm capital structure to pursue their own interests, thus using less debt financing and operating leasing. In addition, our estimation results suggest a positive relationship between debt and operating leases when CEO power is smaller than certain threshold, while it becomes negative if the power index exceeds the threshold level.

6. Conclusion

There is a large literature on the firm financing decisions. However, less emphasis has been laid on the nonlinear impact of CEO power, especially for developing countries. To fill this research gap, this paper investigates the nonlinear effect of CEO power on firm leverage and operating lease share using a sample of 297 China’s listed SMEs during the period 2009–2012. In other words, we aim at answering whether there exists a threshold in CEO power, above which the debt ratio and operating lease share impact of CEO power changes critically. To this end, we use the instrumental variable threshold regression approach developed by Caner and Hansen (2004) to test our hypotheses. The empirical results indicated that there is a power threshold in the CEO power-debt financing nexus. For CEO power index below the threshold, CEO power will exert a positive effect on debt ratio, suggesting firms with weak CEOs are more likely to use higher leverage. On the other hand, if the index exceeds the threshold value, the impact of CEO power on debt ratio will turn negative. This implies that powerful CEOs tend to manipulate firms’ leverage levels to avoid the constraints resulting from debt financing (or disciplining role of debt), the threat of a bankruptcy and job loss. This finding is consistent with Chintrakarn et al. (2014) which report a hump-shaped relationship between CEO dominance and firm leverage for a sample of US firms. Therefore, our study provides new evidence on this non-linear relationship for a sample of Chinese SMEs firms listed on the Shenzhen Stock Exchange (SZSE).

Moreover, previous research has shown a mixed results about the relationship between debt and leases. Our results indicate that for the CEO power below the threshold, debt and leases are positively related, confirming the debt-lease complementary theory. However, when CEO power beyond the certain threshold, debt ratio becomes negatively related to operating lease share, consistent with debt-lease substitute theory. Align with the two contradicted theories, we also observe an inverted U-shaped relationship between CEO power and operating leasing.