Devos, Erik; Dhillon, Upinder; Jagannathan, Murali; … - In: Journal of Corporate Finance 18 (2012) 3, pp. 664-682
In this paper, we examine why firms have no debt in their capital structure. We reject the hypothesis that zero-leverage policies are driven by entrenched managers attempting to avoid the disciplinary pressures of debt. These firms do not have weaker internal or external governance mechanisms....