Capital Structure and CEO’s Personal Characteristics: Evidence from Jordan

The aim of this study is to examine the effect of the CEO’s personal characteristics (overconfidence, age and gender) on the capital structure choices among non-financial Jordanian companies over the period 2008-2013. We use panel data for 201 non-financial companies listed on the Amman Stock Exchange (ASE). The results of our study reveal that CEOs’ overconfidence and gender are positively and significantly related to the leverage ratio as a proxy for capital structure. However, age is negatively and significantly associated with capital structure. The findings of the study should be of interest to policymakers, regulators and academics regarding the impact of CEO characteristics on the capital structure not only in Jordan but also in other developing countries. Further, the findings of this study are likely to be of interest to investors, since we introduce new empirical evidence about companies’ capital structure in Jordan. Our study contributes to research into capital structure by examining another dimension, that is, the effect of the CEO’s personal characteristics (age and gender), which has not been previously investigated in capital structure decisions and thus provides new empirical evidence in this area.