Acta Universitatis Danubius. Œconomica, Vol 8, No 2 (2012)

Modelling the Causal Relationship between Seniority of the CEO in the Enterprise and the Debt in USA

Chafik Kammoun, Boujelbène Younes

Abstract


This paper develops a model in which the interaction of Seniority of the C.E.O in the enterprise and the debt can be analyzed. Multiple securities arise as optimal in the model. This allows for a meaningful analysis of interaction effects between Seniority of the C.E.O in the enterprise and the debt for a panel of USA firms from 2000 to 2009. There is a predicted (positive) relationship between Seniority of the C.E.O in the enterprise and the debt. Finally, this paper uses the recent developments in the econometrics of non-stationary dynamic panels to reassess the relationship between Seniority of the C.E.O in the enterprise and the debt


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