Empirical Study on the Impact of Managerial Power on Corporate Financing Behavior
|Keywords||Administrator powers Capital Structure Debt maturity structure Control Theory|
New Institutional Economics shows that due to contractual incompleteness and asymmetric information exists , causing between managers and shareholders of the objective function is inconsistent , causing managers at the expense of the interests of shareholders and pursue their own interests at the expense of maximizing behavior , leading to management and the shareholders have a serious agency problems . Agency theory suggests that debt financing can effectively supervise and constrain managers behavior, especially short-term debt , reducing the free cash flow managers dominate , suppress manager job consumption , overinvestment and empire building of self-interested behavior , and thus relieve managers and agency problems between shareholders (Jensen, 1976). because of this, the classic agency theory emphasizes governance effect of debt financing . On the other hand , capital structure control theory states that the debt can dominate control over the distribution between managers and creditors , leading managers in the face of income , constraints, and bankruptcy often by selecting the appropriate financing structure for maximizing their own interests purposes. Based on the prevalence of listed companies in China \corporate financing behavior, trying to draw some theoretical and practical significance of the research findings . First, the paper reviews the capital structure and debt maturity structure theory theory development context, from agency theory and control theory to extract the relevant managers of power and capital structure , debt maturity structure relations theory , this paper puts forward the hypothesis . Secondly, this paper constructed using principal component analysis power index managers and managers empirical investigation powers of the company capital structure and debt maturity structure choices. Empirical studies have found that the higher the concentration of power managers , managers prefer the more equity financing and reduce debt financing. Further studies showed that , in the choice of debt financing, the higher the concentration of power managers , managers prefer the more long-term debt and reduce short-term debt . Finally, the response to these findings, this paper further strengthen and improve corporate governance , improve the legal protection of investors, relevant policy recommendations .