Corporate board and dynamics of capital structure: Evidence from UK, France and Germany

Ernest Ezeani*, Frank Kwabi, Rami Salem, Muhammad Usman, Rateb Mohammad Hamad Alqatamin, Philip Kostov

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

29 Citations (Scopus)
51 Downloads (Pure)


Theoretical arguments suggest that capital structure will adjust to the dynamics of the corporate governance environment. In line with this prediction, we examine the impact of board characteristics on capital structure dynamics and the speed of adjustment. Using 2690 firm-year observations for 2009–2018, we find that firms in a stakeholder-oriented corporate governance environment adjust their leverage faster than those in a shareholder-oriented environment. We also find that corporate board characteristics influence firms' capital structure and speed of adjustment towards target leverage. Our findings are robust to alternative measures of leverage and endogeneity. The overall evidence supports the relevance of the corporate board's composition in both shareholder-oriented and stakeholder-oriented corporate governanc (CG) environments. We conclude that board composition mitigates agency conflict.

Original languageEnglish
Pages (from-to)3281-3298
Number of pages18
JournalInternational Journal of Finance and Economics
Issue number3
Early online date27 Feb 2022
Publication statusPublished - Jul 2023


  • board characteristics
  • capital structure
  • corporate governance
  • speed of adjustment

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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