This study examines the extent to which individual demographic characteristics of owners influence capital structure desisions. Using the Federal Reserve's 2003 Survey of Small Business Finances, we estimate the joint effects of traditional capital structure determinants and manager age, gender, education, business experience, sophistication, and wealth on the capital structure of single-owner corporations. By calculating the marginal contribution of personal risk tolerance, we demonstrate that owner preference contributes meaningfully to the explained variation in capital structure decisions.
Capital Structure, Risk Tolerance, Owner Preference, Entrepreneurship
Ang, James; Cole, Rebel; and Lawson, Daniel
"The Role of Owner in Capital Structure Decisions: An Analysis of Single-Owner Corporations,"
The Journal of Entrepreneurial Finance:
3, pp. 1-36.
Available at: http://digitalcommons.pepperdine.edu/jef/vol14/iss3/1