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Title: Level leverage decisions and manager characteristics
Authors: Carvalho, Margarita
Cerejeira, João
Keywords: Quantile regression
Capital structure
Manager’s characteristics
Issue Date: 2019
Publisher: Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Citation: Carvalho, M., & Cerejeira, J. (2019). Level leverage decisions and manager characteristics. NIPE Working Papers, 09/2019, 1-43, Universidade do Minho. Disponível no Repositório UPT,
Abstract: This study assess how manager’s characteristics may influence leverage decisions. Using data from European banks, the results show that younger managers are risk-prone and less conservative in leverage decisions. Moreover, it is observed that for higher levels of leverage more experienced managers tend to increase leverage. This is also true for managers with a longer tenure as they may bring their personal preferences towards risk and in this sense they will be more able to increase leverage. However, this effect differs according to the level of leverage at the manager’s appointment date. The inclusion of the decision horizon seems to validate the idea that a short-term managerial horizon enhances the self-interested behaviour of the manager and this may be reflected on capital structure decisions.
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