Do firm characteristics affect debt capacity? Evidence in CEO succession

Chien Chiang Lee, Chih Wei Wang, Chi Yin, Min Rui Choo

研究成果: 雜誌貢獻期刊論文同行評審

3 引文 斯高帕斯(Scopus)


Should firms decrease or increase their debt capacity after professional CEO succession? Examining a sample of all publicly traded firms from 1991 to 2016 in Taiwan, this research finds that firms with professional CEO successors tend to raise less debt and consider the succession of professional managers to be more conservative because they are afraid of being monitored more severely. From the perspectives of firms’ characteristics, those with professional CEO successors and high cash holdings and investment levels are more likely to increase their debt capacity, while those of a larger size and higher post-succession profitability volatility decrease their ability at raising debt. Finally, we hand-collect data and develop a novel method to identify the real founders and reconfirm our empirical evidence. Our findings present financial implications for boards of directors which they can evaluate firms’ cash holdings, investment level, firm size, and profit volatility before deciding on whether to name a CEO successor to take over their firms.

頁(從 - 到)5567-5583
期刊Applied Economics
出版狀態已出版 - 2021


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