CEO's power and capital structure based on Lee's model

Document Type : Research Paper

Authors

1 Professor of Accounting،Islamic Azad University, Science and Research Branch, Tehran

2 account

Abstract

This study examines the effect of CEO's power on corporate leverage by using a sample of 150 listed companies in Tehran Stock Exchange during the period from 2010 to 2017. In particular, this study seeks to investigate the relationship between the power of senior management and financial leverage based on the theory of Agency. To measure the CEO's power index, an index based on the characteristics of four power-related power variables was used, then OLS method was used for estimating regression. The results showed that as CEO increases, the corporate capital structure and the leverage ratio will move in the negative direction and will reduce debt in the corporate capital structure.

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References

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History

  • Receive Date: 22 June 2018
  • Revise Date: 24 November 2018
  • Accept Date: 09 October 2018

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