| In recent years,more and more professionals have called for improving the internal governance structure of enterprises,establishing a modern enterprise system,and then standardizing corporate governance.The issues of corporate governance mainly include the problem of internal operators controlling the company and the hollowing out of major shareholders,and these two types of issues are closely related to the imperfect internal operating mechanism of the company.It is worth noting that the relationship between shareholders and managers is an indirect principal-agent relationship,so the effectiveness of the operating mechanism between the board of directors and the executive team is crucial to agency issues.However,at present,the internal governance structure of most companies is distorted.As far as the board of directors and the general manager’s office are concerned,the functions of the two are mixed,and directors are overly involved in daily decisions of company.The chairman even serves as general manager and holds a lot of power,overriding other directors and executives,the constraint-and-balance relationship between the board of directors and the executive team is weakened.Therefore,strengthening the mechanisms for supervising and balancing power between the board of directors and the executive team will help alleviate the agency conflict between shareholders and managers,and then reduce the phenomenon of internal operators controlling the company.As one of the company’s important financial decisions,financing decisions have always attracted the attention of scholars.In addition to being affected by the company’s own characteristics,the company’s capital structure is also an expression of the wishes of internal operators such as directors and executives.Therefore,reducing the agency conflicts between shareholders and internal operators such as directors and executives is particularly important for optimizing capital structure decisions.The paper defines the effectiveness of the power restrictions and balances mechanism between the board of directors and the executive team as management power balance intensity.The article believes that strengthening the power balance mechanism between the board of directors and the executive team is conducive to the improvement of governance and has a positive impact on agency conflicts,which in turn affects the company’s capital structure decision.At the same time,the company’s investment behavior is closely related to the financing level.Based on this,this paper selects management power balance intensity as the starting point for the study,examines the impact of management power balance intensity on the capital structure.From the perspective that investment driven leads to excessive investment expansion,which leads to overinvestment,the internal mechanism of management power balance intensity to affect the capital structure is also studied.This article focuses on empirical research,and combines relevant normative analysis to select non-financial listed companies from 2010 to 2018 as samples to conduct detailed research on the above issues.The evidence confirms that,first,management power balance intensity has a significant impact on the level of static capital structure and increase the adjustment speed of capital structure;when the capital structure deviates from the target level,the probability that the company adjusts the capital structure upwards by increasing liabilities increases,the probability of adjusting the capital structure downwards by reducing liabilities and issuing stocks increases.Second,management power balance intensity can alleviate overinvestment,thereby affecting the company’s capital structure.Third,with the increase of the degree of overinvestment of the company,the relationship between management power balance intensity and the method of the capital structure adjustment can be significantly weakened.At the same time,property and growth have a certain impact on the debt constraint effect and the company’s internal governance mechanism,which may further affect the relationship between management power balance intensity and the capital structure.Therefore,in the additional researches,this paper examines the regulating effect of property and growth on management power balance intensity to affect the company’s capital structure.After dividing the sample into sub-samples of state-owned enterprises,private enterprises,and family-owned enterprises,we check whether the main results are different.Empirical tests show that,first,state-owned enterprises and high growth will significantly weaken the governance effectiveness of management power balance intensity on the company’s capital structure.Second,the impact of management power balance intensity on the capital structure and its influence mechanism are most obvious in family businesses.Third,as management power balance intensity increases,there are differences in the way of capital structure adjustment for enterprises with different property.The contribution of this paper lies in the following aspects: firstly,for the first time,this article starts with management power balance intensity and adopts an empirical method to conduct in-depth research on the relationship between management power balance intensity and the capital structure.So far,there are few or no empirical literatures examining management power balance intensity.The author attempts to enrich the relevant literature through the research in this paper.Secondly,combining the theoretical research results of sociology,political science,and law,this paper for the first time to define the concept of management power balance intensity,proves positive impact of effective internal governance mechanisms in capital structure.Third,this paper measures the strength of the power balance from three dimensions,which includes the strength of the chairman’s power balance on the general manager,board balance of power over executive team,the board’s internal power balance.At the same time,the comprehensive variables constructed by these three dimensions are also used to measure.The setting of variables not only takes into account individuals such as the chairman and general manager,but also balances power within the group such as the board of directors and the executive team.Compared with previous studies,the variables are more comprehensive and systematic. |
