Read full paper at: http://www.scirp.org/journal/PaperInformation.aspx?PaperID=50664#.VEh-G1fHRK0 Author(s) Yiping Chen , Xindong Zhang , Zhe Liu Affiliation(s) School of Economic and Management, Shanxi University, Taiyuan, China . ABSTRACT In this paper, we analyze the low-leverage phenomenon of firms and examine the question of why some firms have low leverage in China. We find Low-leverage firms are smaller, have higher profitability and hold more cash balances than control firms chosen by industry and size. Our evidence supports the hypothesis that these firms are operated by risk-aversion manager. Firms with older Chief Executive Officer (CEO) and higher first shareholder ownership are more likely to have ...
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