Abstract
This study examines the evolution of capital structure for Chinese stock issuers over an eleven-year period, stretching three years pre- to eight years post-listing. The paper scrutinizes the role of a key demographic in this seasoning process: The age of board officers. The present study’s key postulate is that board age proxies for a firm’s growth options. While issuer indebtedness exhibits little to no connection with other board properties, a strong inverse association exists with officer age. Moreover, entities with older boards experience notably smaller contractions in leverage on listing, as well as more subdued upswings post-IPO. Results are congruent with older board firms possessing fewer growth options and raising less capital at IPO. Additionally, study findings suggest that the Global Financial Crisis delayed Chinese firms’ re-leveraging adjustments post-IPO. Finally, changes to leverage at IPO, and in the years thereafter, appear similar for both hot- and cold-market issuers.
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