The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
Can Managerial Discretion Explain Observed Leverage Ratios?
Open accessAbstract
This paper analyzes the impact of managerial discretion and corporate control mechanisms on leverage and firm value within a contingent claims model where the manager derives perquisites from investment. Optimal capital structure reflects both the tax adavantage of debt less bankruptcy costs and the agency costs of managerial discretion. Actual capital structure reflects the trade-off made by the manager between his empire-building desires and the need to ensure sufficient efficiency to prevent control challenges. The model shows that manager-shareholder conflicts can explain the low debt levels observed in practice. It also examines the impact of these conflicts on the cross-sectional variation in capital structures.
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Citations
Cites
What Do We Know about Capital Structure? Some Evidence from International Data
RAJAN, R. G., & ZINGALES, L. (1995) · The Journal of Finance · doi:10.1111/j.1540-6261.1995.tb05184.x · Cited by 6,538
Cited by
Capital structure decisions: Which factors are reliably important?
Frank, M. Z., & Goyal, V. K. (2009) · Financial Management · doi:10.1111/j.1755-053x.2009.01026.x · Cited by 2,859
Managerial Traits and Capital Structure Decisions
Hackbarth, D. (2008) · Journal of Financial and Quantitative Analysis · doi:10.1017/s002210900001437x · Cited by 540
Trade-Off and Pecking Order Theories of Debt
Frank, M. Z., & Goyal, V. K. (2007) · SSRN Electronic Journal · doi:10.2139/ssrn.670543 · Cited by 455
Dynamic Models and Structural Estimation in Corporate Finance
Strebulaev, I. A. (2011) · Foundations and Trends® in Finance · doi:10.1561/0500000035 · Cited by 259
Corporate Governance and Costs of Equity: Theory and Evidence
Li, D., & Li, E. X. N. (2018) · Management Science · doi:10.1287/mnsc.2016.2570 · Cited by 22
Metadata
- Authors
- Morellec, E.
- Venue
- Review of Financial Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2003-10-15
- Volume
- 17
- Issue
- 1
- Pages
- 257-294
- ISSN
- 0893-9454 (ISSN-L)
- 1465-7368
- OpenAlex
- W2091530448
- Cited by
- 360
- References
- 1
- FWCI
- 62.17
- Type
- journal article
- Language
- en
- Open access
- green
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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
