Corporate board reform and capital structure dynamics: evidence from UK

Ernest Ezeani (), Samuel Fulgence (), Wansu Hu (), Frank Kwabi () and Chizindu Wonu ()
Additional contact information
Ernest Ezeani: Heriot-Watt University
Samuel Fulgence: De Montfort University
Wansu Hu: De Montfort University
Frank Kwabi: De Montfort University
Chizindu Wonu: De Montfort University

Review of Quantitative Finance and Accounting, 2025, vol. 65, issue 3, No 3, 973-1003

Abstract: Abstract Theoretical arguments suggest that corporate board reform will influence firms’ capital structure choices. Consistent with this argument, we examine the impact of corporate board reform on the capital structure dynamics of UK firms. Using 12,384 firm-year observations between 2006 and 2020, we provide evidence of a higher speed of adjustment after board reform. Using an additional analysis, we find that firms with higher agency costs (in the pre-reform phase) are more likely to implement the monitoring effect of debt. Also, our decomposition analysis shows that firms increased both short-term and long-term debt after the board reform, suggesting that improved board monitoring positively impacts firm leverage.Query Our results are robust to alternative leverage proxies and batteries of robustness tests.

Keywords: Capital structure; Corporate board reform; Corporate governance; Speed of adjustment (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11156-024-01365-2 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:rqfnac:v:65:y:2025:i:3:d:10.1007_s11156-024-01365-2

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/11156/PS2

DOI: 10.1007/s11156-024-01365-2

Access Statistics for this article

Review of Quantitative Finance and Accounting is currently edited by Cheng-Few Lee

More articles in Review of Quantitative Finance and Accounting from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().