CEO Characteristics and Corporate Leverage A Norwegian Perspective

Abstract

We study the relationship between CEO Characteristics and corporate leverage in Norwegian listed companies using an unbalanced panel of 303 firms from 2000 to 2017. To study the relationship, fixed effects regressions and gradient tree boosting in XGBoost are used. We ask, “Does CEO Characteristics affect financial leverage?”. We were not able to confirm that CEO characteristics are causing corporate leverage, but CEO Salary does have a correlation across models. The lack of a strong effect found in our thesis is a healthy sign in terms of corporate governance in listed Norwegian companies. We also confirm that commonly accepted determinants of capital structure do predict leverage ratios on the Norwegian stock exchange as found in the literature. Keywords: Behavioral Finance, Capital Structure, CEO characteristics, Corporate Finance, Corporate Governance, Corporate Leverage, Norwegian Stock Market