The effects of executives with foreign experience on capital structure adjustments toward targets: Evidence from China

Yan Gu, Hung-Yi Huang, Kung-Cheng Ho and Shengnan Liu

Economic Research-Ekonomska Istraživanja, 2023, vol. 36, issue 1, 1470-1489

Abstract: This study discusses the impact of executives with foreign experience on decisions involving corporate capital structures. Based on a sample of Chinese A-share listed companies, this study finds that firms with (more) executives with foreign experience adjust to the optimal capital structure faster. The effect exists mainly for over-levered firms that need to deleverage. The empirical results remain robust when using alternative methods to estimate target leverage, excluding the effects of mechanical adjustments, controlling the impact of corporate governance, and using the full sample to test asymmetric effects. In addition, firms managed by executives with foreign experience tend to maintain low leverage for a long time. Overall, the results show that executives with foreign experience help companies adopt more efficient and conservative capital structure adjustment decisions. The results enrich the literature on the impact of foreign experience on corporate decision-making.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1331677X.2022.2089708 (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:reroxx:v:36:y:2023:i:1:p:1470-1489

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rero20

DOI: 10.1080/1331677X.2022.2089708

Access Statistics for this article

Economic Research-Ekonomska Istraživanja is currently edited by Marinko Skare

More articles in Economic Research-Ekonomska Istraživanja from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().