The Role of Owner in Capital Structure Decisions: An Analysis of Single-Owner Corporations

Journal of Entrepreneurial Finance 14, 1-36

49 Pages Posted: 9 Sep 2010 Last revised: 13 Jan 2013

See all articles by James S. Ang

James S. Ang

Florida State University; Florida State University - College of Law

Rebel A. Cole

Florida Atlantic University

Dan Lawson

Gonzaga University

Date Written: September 8, 2010

Abstract

This study examines the extent to which individual demographic characteristics of owners influence capital structure decisions. 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.

Keywords: capital structure, small business, personal risk characteristics, SSBF

JEL Classification: G30, G32, M13

Suggested Citation

Ang, James S. and Cole, Rebel A. and Lawson, Daniel T., The Role of Owner in Capital Structure Decisions: An Analysis of Single-Owner Corporations (September 8, 2010). Journal of Entrepreneurial Finance 14, 1-36. Available at SSRN: https://ssrn.com/abstract=1674077

James S. Ang

Florida State University ( email )

College of Business
Tallahassee, FL 32306-1042
United States
904-644-8208 (Phone)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

Rebel A. Cole

Florida Atlantic University ( email )

College of Business
777 Glades Road
Boca Raton, FL 33431
United States
1-561-297-4969 (Phone)

HOME PAGE: http://rebelcole.com

Daniel T. Lawson (Contact Author)

Gonzaga University ( email )

502 E Boone Ave
Spokane, WA 99258
United States

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