Abstract
This study examines the effect of CEO social capital on capital structure complexity (CSC). Furthermore, this study explores the need for external financing, access to debt markets, and capacity for additional borrowing, CEO-specific variables, and firm-specific variables with reference to CSC. Fixed-effects regressions estimate the relations between CEO social capital and capital structure complexity. Capital structure complexity is measured using several capital sources and capital concentration ratios. The empirical findings show that CEOs with trust in government and local police, membership in non-profit organizations, altruism, and political participation have more complex and less concentrated capital structures. In contrast, CEOs with trust in government and membership in government organizations have less complex and highly concentrated capital structures. The evidence of determinants of CSC, CEO-specific variables, and firm-specific variables on CSC is also documented. The results also hold in various robustness checks and tests for endogeneity.
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