Capital Structure, Staggered Boards, and Firm Value

Pornsit Jiraporn · Yixin Liu

90 citations0/0 files storedFinancial Analysts Journal

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Corporate Insolvency and Governance Political Influence and Corporate Strategies

Abstract

Grounded in agency theory, this study investigates whether staggered boards (in which only a portion of directors are elected at one time) influence capital structure choices. Leverage has been argued and shown to alleviate agency costs. Because staggered boards can entrench inefficient managers, they may motivate managers to adopt a lower level of debt, thereby avoiding the disciplinary mechanisms associated with leverage. The empirical evidence supports this hypothesis, showing that firms with a staggered board are significantly less leveraged than those with unitary boards (in which all board members are elected at one time). The impact of staggered boards on capital structure choices exists both in industrial and regulated firms although it seems to vanish after enactment of the Sarbanes–Oxley Act of 2002. The results show that staggered boards are likely to bring about, and do not merely reflect, lower leverage. Finally, the results demonstrate no significant adverse impact on firm value as a result of excess leverage.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 90 citations exist upstream.

References

1986Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers 1973Risk, Return, and Equilibrium: Empirical Tests 1980Agency Problems and the Theory of the Firm 1984The Capital Structure Puzzle 1988Management ownership and market valuation 2003Corporate Governance and Equity Prices 1988The Determinants of Capital Structure Choice 1999Corporate governance, chief executive officer compensation, and firm performance

Cited by

2010Liquidity and capital structure: The case of Thailand 2023The Effect of Capital Structure on Firm Value: A Study of Companies Listed on the Vietnamese Stock Market 2022Carbon Emissions, Corporate Governance, and Staggered Boards 2021Impact of financial leverage on sustainable growth, market performance, and profitability 2016PENGARUH TATA KELOLA PERUSAHAAN TERHADAP NILAI PERUSAHAAN PADA PERUSAHAAN SEKTOR KEUANGAN YANG TERDAFTAR DI BEI 2012How Do Powerful CEOs Affect Analyst Coverage?

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.