 Do staggered board elections affect firms' financing costs? Evidence from ChinaChen Yugang, Liu Yu, Yasir Shahab and Zhou Yuan International Journal of Finance & Economics, 2021, vol. 26, issue 2, 2118-2133 Abstract: As an important provision in a company's charter, the requirement of staggered board elections can help management protect themselves or protect the interests of investors. We examined a unique dataset of Chinese listed firms from the period of 2004–2014, and our findings are twofold. First, we find that the establishment of a staggered board in a company's article of association increases the equity financing costs as well as the debt financing costs. This result is in line with management defense hypothesis that staggered boards are an overprotection for the management. Second, our results show that a cumulative voting system plays an effective role in reducing the impact of a staggered board on a firm's financing costs. This moderating impact is higher for the debt financing costs and lower for the equity financing costs. The result shows that “debt investors” value a cumulative voting system because of its control of the corporate operations and board activities, while “equity investors” believe staggered board elections have a larger influence on the corporate governance. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wly:ijfiec:v:26:y:2021:i:2:p:2118-2133 Ordering information: This journal article can be ordered from Access Statistics for this article International Journal of Finance & Economics is currently edited by Mark P. Taylor, Keith Cuthbertson and Michael P. Dooley More articles in International Journal of Finance & Economics from John Wiley & Sons, Ltd. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.