Do Anglo-Saxon directors affect leverage?

Abstract

We investigate the impact of Anglo-Saxon directors on leverage of Swiss listed companies. Higher leverage increases a company's risk profile, and individuals with an Anglo-Saxon cultural background are considered less risk averse than others. Using a sample of 1556 firm-year observations from 2005 to 2015, we find empirical evidence supporting our hypothesis that Anglo-Saxon directors increase leverage. The result is robust to the inclusion of a battery of control variables, fixed effects, and instrumental variable estimation.