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With the reform of our property rightssystem, the maturity of the capital market, and the diversification ofcorporate financing, the capital structure decision has become the majorconcern of financial management. There are numbers of researches on how todetermine the optimal capital structure, what factors affect the capitalstructure and what the relationship is like between the capital structure andthe firm value. Built upon prior literature, this paper investigates how managerialpower influences the capital structure with the operation risks and thecharacteristics of the directors’ structure. We find that the capital structuredeviates from the optimal level more in firms with stronger managerial power,and these firms have a stronger discount on such deviation.


Managerial Power, Capital Structure, Firm Value

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Zhang, C. and Zhang, G. 2014 Managerial Power, Capital Structure and Firm Value. Open Journal of Social Sciences, 2, 138-142. doi: 10.4236-jss.2014.212019.

Author: Chunlong Zhang, Guoliang Zhang



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