| Summary: | 碩士 === 國立高雄第一科技大學 === 財務管理所 === 97 === The aim of our study is to examine the relationship between top management team (TMT) characteristics and financing policy, based on the Upper-Echelons Theory. Using a sample of the companies listed on TSE and OTC during 2003-2007, the results show that (1) A positive relationship between TMT tenure and shareholdings and debt financing. This implies that executives with longer tenures want to maintain their previous management strategies, hence they are less likely to raise the profits and growth of the firm. To maintain the current corporate status, they tend to depend on debt financing which allow them to avoid the problem of earning dilution and enable them to transmit insider information. TMT shareholdings, consistent with the hypotheses of management entrenchment and convergence of interest, have positive effects on leverage. (2) TMT age, education and size are negatively related to leverage. This implies that older executives might be unwilling to take more financial risks in fear of putting their future career planning under the threat of bankruptcy. Executives with higher levels of education tend to have abilities to cope with the complicated listing procedures and thus more likely to take potential risks of equity financing, thus reducing the possibility of mispricing stocks. A larger team has more heterogeneity among its members. When such a heterogeneous group is faced with a financial crisis arising from debt financing, the members might have more difficulties in coordination and communication, hence unable to reach a consensus in haste. In such a situation, the firm’s finances might easily worsen, therefore increasing preference for debt financing in large groups.
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