Article
CEO power, corporate governance, and firm leverage
Journal of Economic Analysis
(2024)
Abstract
This study empirically examines the effect of corporate governance on the relation between CEO power and firm leverage. Results from OLS and industry fixed effects regressions show that CEO power is positively associated with firm leverage. However, this association is driven by the strength of corporate governance as powerful CEOs tend to choose higher levels of debt only when corporate governance is strong. When corporate governance is weak, CEO power does not seem to have any effect on firm leverage. Overall, results indicate that strong corporate governance mitigates the severity of manager-shareholder conflicts and induces powerful CEOs to choose higher leverage.
Disciplines
Publication Date
2024
DOI
https://doi.org/10.58567/jea03030012
Citation Information
Shahbaz A Sheikh. "CEO power, corporate governance, and firm leverage" Journal of Economic Analysis Vol. 3 Iss. 3 (2024) p. 207 - 226 ISSN: 2811-0943 Available at: http://works.bepress.com/shahbaz_sheikh/34/