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Can capital structure mismatch influence corporate risk-taking? From the prospective of earning management

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  • Li, Wen
  • Zhou, Qibo

Abstract

This paper empirically investigates how capital structure imbalance affects corporate risk-taking among non-financial companies listed on the Shanghai and Shenzhen A-share markets in China. The findings reveal that a mismatch in capital structure significantly lowers the level of corporate risk-taking. Mechanism testing indicates that this inhibitory effect operates through the influence on earnings management. Additional subgroup analyses show that the dampening effect of capital structure imbalance on corporate risk-taking is more pronounced in privately-owned enterprises.

Suggested Citation

  • Li, Wen & Zhou, Qibo, 2025. "Can capital structure mismatch influence corporate risk-taking? From the prospective of earning management," Finance Research Letters, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324015952
    DOI: 10.1016/j.frl.2024.106566
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    References listed on IDEAS

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    Keywords

    Earnings management; Corporate risk-taking;

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