Testing the effects of capital structure on entrepreneurial effort

Yan Wendy Wu

Applied Financial Economics, 2010, vol. 20, issue 10, 785-794

Abstract: Do entrepreneurs work less or harder when they borrow more? This article tests how entrepreneurial effort is affected by the firm's financing choice. In line with the typical agency theory prediction, entrepreneurial effort is negatively related to the magnitude of the equity financing. Furthermore, accounting for firm and entrepreneur heterogeneities, I find that entrepreneurs work less when they use more debt financing, and higher firm risk leads to greater entrepreneurial effort reductions.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/09603101003652391 (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:taf:apfiec:v:20:y:2010:i:10:p:785-794

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAFE20

DOI: 10.1080/09603101003652391

Access Statistics for this article

Applied Financial Economics is currently edited by Anita Phillips

More articles in Applied Financial Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().