The empirical literature provides the effect agency conflicts on capital structure choices. Yet previous researchers fail to recognize the impact of corporate governance quality on the adjustment speed of capital structure. Especially, this paper considers two different views (the defense effect...

Using a sample of management forecasts, we find that higher CEO and CFO equity compensation and lower institutional ownership concentration, percentage of independent director, and number of analyst following induce managers to release significantly more bad news, downward biased management...