TITLE:
Managerial Macro-Cognition and the Speed of Leverage Adjustment
AUTHORS:
Yajie Jiang
KEYWORDS:
Managerial Macro-Cognition, The Speed of Leverage Adjustment, Manager Heterogeneity
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.10 No.1,
January
9,
2020
ABSTRACT: This study takes advantage of the concept of “Managerial Macro-Cognition” (MMC) to explore how does the different macro cognition of executives will affect their capital structure decision. Drawing on a sample of Chinese listed firms from 2002 to 2018, I find that under the same conditions, the enterprise has executives with higher macro cognition can adjust its capital structure faster, the promote effect on the speed of the leverage adjustment caused by the macro cognition of executive is more obvious when cognition is about future. Besides, when the company is faced with financing constraints, tight monetary policy and low equity concentration, the influence of executives’ macro cognition on the adjustment speed is more obvious.