Manager's Financial Experience, Risk Preferences And Dynamic Capital Structure Adjustment

With the evolution of capital structure theory,the existence of the target capital structure is gradually verified.At the same time,with the maturity of research methods and the development of measurement tools,the estimation model of the target capital structure is gradually established,which in turn sets off the prelude to the dynamic study of capital structure.At present,the research on the dynamic adjustment of capital structure mainly focuses on the external environment and internal characteristics of enterprises,and rarely considers the influence of managers' behavioral preferences and background characteristics.Based on this,the dissertation starts from the theory of high-rise echelon,the theory of foreground and the capital structure theory,and studies the influence of manager's external traits,financial experience and inherent trait risk preference on the dynamic adjustment of capital structure.Higher-order theory introduces the manager's personal background characteristics into the financial decisions of the enterprise;the prospect theory revises the traditional economic hypothesis according to the research results of psychology,and integrates human behavior preferences into the standard economic theory.Under this background,it is of great practical significance to study the relationship between the internal and external characteristics of managers and the dynamic adjustment of capital structure of Chinese listed companies.Based on upper echelons theory and prospect theory,using Chinese listed companies from 2010 to 2015,this paper tests the impact of managerial characteristics on the dynamic adjustment of capital structure.The empirical result shows that compared to managers without financial experience,managers with financial experience have lower risk preferences.The risk preferences will have a significant impact on the speed and the bias of capital structure adjustment.That is to say,the higher the risk preferences are,the faster the speed of capital structure adjustment will be and the higher the bias from the target capital structure will be.Further research shows that the manager's financial experience can significantly suppress the relationship between risk preferences and dynamic adjustment of capital structure.That is to reduce the sensitivity of the relationship between risk preferences and dynamic adjustment of capital structure,thereby increasing the speed of capital structure adjustment and reducing the bias from the target capital structure.The conclusion of this paper not only provides new evidence for the influence of managerial characteristics on corporate financial decision-making,but also enriches the theory of dynamic adjustment of capital structure.