Research On Managerial Traits,Debtfinancing And Firm Value

As one of the main modes of enterprise financing,debt financing has significant effect on enterprise control level of shareholders,managers,creditors and other stakeholders by means of influencing the proportion of total capital in debt capital and equity capital,which has a further effect on corporate value.There're plenty of theoretical and positive researches on debt financing and corporate value.Many significant achievements are gained on the basis of principal-agent theory,contract theory,information economics and property rights theory.With the development of theory of corporate governance,the influence of debt financing on corporate value has been being studied by more and more scholars from the perspective of corporate governance.However,generally,these studies are based on the assumption that the managers are rational and homogeneous.In recent years,the study of behavioral finance shows that managers are not completely rational.Managers'enterprise decision-makings are affected by their deviation of cognition and behavior.Upper echelons theory also noted that managers' different background characteristics lead to different thinking mode,risk preference and professional skills,which causes deviation of information gathering,cognitive and processing capabilities and further causes significant changes in corporate decision-making and performance.Based on the data of Chinese listed companies from 2008 to 2013,the paper differentiates the differences among corporate property rights,and empirically examines the contact between debt financing and its effect of corporate governance,and distinguishes managers' traits as managers' external and internal traits.According to upper echelons theory,measuring managers'internal characteristics by external characteristics,the paper further empirical tests the effect of managers with different traits on debt financing and corporate value.The results indicate that debt financing can reduce the agency costs and has positive governance effect on corporate value.Managers are more likely to be overconfident and prefer debt financing when they are males with better education level,shorter tenure and financial related career experiences.Managers' gender,education level and career experiences can significantly improve debt financing's positive effect on corporate value.After a further differentiation of corporate property rights,there's a phenomenon that debt financing has more obvious positive impact on non-state-owned companies than state-owned companies.What's more,the positive correlation between debt financing and managers' education level and career experiences is more significant in non-state-owned companies.As a result,in non-state-owned companies,debt financing can significantly improve corporate value.Not only did the paper enrich the literature and empirical evidences in the field of corporate financing and managerial traits,but also revealed the view that managerial traits and property rights are significant factors when we study the corporate governance effects of debt financing to corporate value.