The impact of management confidence on capital structure
This paper represents one of the first studies to document the empirical relation between capital structure and management confidence. In a unique sample of US firms that have existed for over 25 years we find management confidence, as proxied by University of Michigan Consumer Sentiment Index, is highly significant in explaining firm financing decisions. When management confidence is higher firms have higher levels of debt. This result is robust to different definitions of leverage and...[Show more]
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