The Influence Of Executive Characteristics On The Capital Structure Of Chinese

The capital structure of a company can objectively reflect its financing sources and displayits health status. The existing research about capital structure mainly focus on the perspective of corporate governance, company itself, industry and macroeconomic factors,but there are very few scholars pay attention to the factor of executives. If the enterprise is compared to a ship sailing in heavy seas, there will be no doubt the executives are the helmsman of this ship. Faced with the same situation, different executives are subject to their own cognition, values and so on, will take different actions, and make different and even exactly opposite decisions.Based on the literature review, the executives is defined as the senior managers team.And this paper puts forward a way that could measure the average characteristics and heterogeneity characteristics of executives. The average characteristics include the proportion of male executives, mean of age, mean of education, mean of tenure and numbers of executives.The heterogeneity characteristics include the age heterogeneity, academic heterogeneity and tenure heterogeneity. This paper will give a comprehensive interpretation, from point to surface,aboutthe influence of executives’ characteristics on Chinese listed companies’ static capital structure, and the roles ofthese characteristics played in dynamic adjustment of capital structure. Empirical study shows that: the higher proportion of male executives and the more numbers of executives, the higher companies’ leverage ratio and the faster adjustment of capital structure; the older executives, thelower companies’ leverage ratio and the slower adjustment of capital structure. The relationship between executives’ average education level and capital structure is negative, but not significant; however, the average education level of executives can accelerate the speed of capital structure adjustment.The longer average tenure of executives, the lower companies’ leverage ratio and the faster adjustment of capital structure. The age heterogeneity, academic heterogeneity and tenure heterogeneity of executives will accelerate the speed of capital structure adjustment. Different heterogeneitycharacteristics, however, have different effects on companies’ capital structure: age heterogeneity will raise companies’ leverage ratio, while academic heterogeneity and tenure heterogeneity will reduce the companies’ leverage ratio.From the perspective of executives’ characteristics, if companies want to have a reasonable and healthy capital structure, they should begin to build a reasonable talent pool, especially on the construction and arrangement of the system of the executive teams, and consider fully the background characteristics of the executive teams, including the orientation of the average characteristics of the executives and the evaluation of the heterogeneity of the executives.