Corporate governance and the choice between bank debt and public debt

IF 5.5 Q1 BUSINESS

Corporate Governance-The International Journal of Business in Society Pub Date : 2023-08-08 DOI:10.1108/cg-01-2022-0028

I. Ahmed, Owais Mehmood, Zeshan Ghafoor, Syed Hassan Jamil, Afkar Majeed

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引用次数: 0

Abstract

Purpose This study aims to examine the impact of board characteristics on debt choice. Design/methodology/approach The sample comprises of unique nonfinancial firms listed in the FTSE 350 over the period 2011–2018. This study uses Tobit and OLS regressions to check the impact of board characteristics on debt choice. The results are robust to the battery of robust checks. Findings This study finds that board size and board independence are positively associated with public debt. However, CEO duality and board meetings frequency are inversely associated with public debt. Overall, the findings are consistent with the “financial intermediation theory” that the firms with weak governance rely on bank financing, and firms with better corporate governance go for public debt. Research limitations/implications This study offers significant insights for investors and policymakers. Originality/value This study offers new insights regarding the role of board characteristics in firms’ debt choice by showing the significant impact of board characteristics on debt choice. The findings indicate that the board’s efficient internal monitoring may substitute external monitoring by the bank.

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公司治理以及银行债务和公共债务之间的选择

目的研究董事会特征对债务选择的影响。设计/方法/方法样本包括2011-2018年在富时350指数中上市的独特非金融公司。本研究使用Tobit和OLS回归来检验董事会特征对债务选择的影响。结果对一系列的稳健检查是稳健的。本研究发现，董事会规模和董事会独立性与公共债务呈正相关。然而，CEO的双重性和董事会会议的频率与公共债务呈负相关。总体而言，研究结果与“金融中介理论”一致，即公司治理较弱的企业依赖银行融资，公司治理较好的企业倾向于公共债务。本研究为投资者和政策制定者提供了重要的见解。独创性/价值本研究通过展示董事会特征对债务选择的显著影响，为董事会特征在企业债务选择中的作用提供了新的见解。研究结果表明，董事会有效的内部监督可以替代银行的外部监督。

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来源期刊

Corporate Governance-The International Journal of Business in Society BUSINESS-

CiteScore

11.20

自引率

33.90%

发文量

期刊介绍： Providing a consistent source of in-depth information, analysis and advice considering corporate governance on an international scale, Corporate Governance: The International Journal of Business in Society focuses on knowledge development, practice and performance standards for scholars and Boards of Directors/ Governors of companies throughout the world. The journal publishes a diverse range of substantive theoretical and methodological debates as well as practical developments in the field of corporate governance worldwide. The journal particularly encourages attention to the impact of changes of business/corporate governance forms and practices on people, and the sustainability of different governance models. Articles that highlight models and structures that advance the interests, dignity and well being of all stakeholders, in a sustainable manner, are particularly welcome. The journal covers a broad spectrum of governance-related themes including: -Effective boardroom performance -Control and regulation -Executive leadership -The role and contribution of external (non-executive) directors -The growing importance of governance in the wake of ever-greater corporate scandals -Redefinitions and reassessments of corporate governance models -The role of business in society -The changing nature of the relationship and responsibilities of the firm towards various stakeholders -The incentives required to encourage more socially- and environmentally-responsible corporate action -The role and impact of local and international regulatory agencies and regimes on corporate behaviour.

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