| Summary: | 碩士 === 銘傳大學 === 財務金融學系碩士班 === 100 === Peer firms play a central role in shaping a variety of corporate policies. However, most researches on corporate financial policy assume that firms choose their capital structures independently of their peers, and the role for competitor firm’s behavior in affecting corporate capital structure is often ignored. Thus, the goal of this paper is to identify whether, how, and why peer firm behavior matters for corporate financial policy.
This study follows Taiwan Stock Exchange to classify the industries, and sums up the relative characteristics variables for corporate leverage by past studies. Finally, the two-stage least squares method is applied in this paper.
The empirical results of this study show that firms will consider the peer’s financial decision rather than make financing decisions in isolation. And the follower will learn the leader’s financial policy. Peer effect will be more obvious in competitive industry and unique products market. Empirical evidence also shows that higher paid CEO’s has most influence in the capital structure of industry, and then affect the lower paid CEOs decision.
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