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- W3086435410 abstract "In this paper, we take a novel theoretical approach to understand the puzzling phenomenon of zero-leverage firms. First, we delve into different theories of finance, management, economics and entrepreneurship seeking to arrive at a more integrative model of a firm’s financial behavior. This effort culminates in the presentation of a novel construct called rule taking, which reflects the degree which a manager has their discretionary power constrained. We, then, outline two hypotheses concerning how the interplay of governance and innovation can affect a firm’s financial outcomes in apparently surprising ways. Firstly, we hypothesize that corporate risk taking is positively associated with zero leverage. Second, we hypothesize that our novel construct of rule taking is negatively associated with zero leverage. Using a panel regression with a sample of 24,484 firms, our results corroborate our hypothesis. By taking a detailed look at subtle determinants of managerial and corporate behavior, we can provide a novel alternative explanation to a phenomenon that have puzzled researchers for decades." @default.
- W3086435410 created "2020-09-21" @default.
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- W3086435410 date "2019-09-28" @default.
- W3086435410 modified "2023-09-26" @default.
- W3086435410 title "Risk Taking, Rule Taking and the Zero-Leverage Puzzle" @default.
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