CEO foreign experience and firm leverage: evidence from Vietnam

Nguyen, Thanh Huong; Ha, Phuoc Vu Article CEO foreign experience and firm leverage: evidence from Vietnam Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Nguyen, Thanh Huong; Ha, Phuoc Vu (2024) : CEO foreign experience and firm leverage: evidence from Vietnam, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-13, https://doi.org/10.1080/23311975.2024.2401156 This Version is available at: https://hdl.handle.net/10419/326559 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 CEO foreign experience and firm leverage: evidence from Vietnam Thanh Huong Nguyen & Phuoc Vu Ha To cite this article: Thanh Huong Nguyen & Phuoc Vu Ha (2024) CEO foreign experience and firm leverage: evidence from Vietnam, Cogent Business & Management, 11:1, 2401156, DOI: 10.1080/23311975.2024.2401156 To link to this article: https://doi.org/10.1080/23311975.2024.2401156 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group View supplementary material Published online: 13 Sep 2024. Submit your article to this journal Article views: 802 View related articles View Crossmark data Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 ACCOUNTING, CORPORATE GOVERNANCE & BUSINESS ETHICS | RESEARCH ARTICLE Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2401156 CEO foreign experience and firm leverage: evidence from Vietnam Thanh Huong Nguyen and Phuoc Vu Ha university of economics, the university of Danang, Da nang, Vietnam ABSTRACT The study examines whether CEOs with foreign experience affect the corporate financing decisions in the Vietnamese market. Foreign-experienced CEOs are defined as those who worked and/or studied abroad before returning to Vietnam. Using a unique, manually collected dataset of 322 non-financial firms listed on the Ho Chi Minh stock exchange (HOSE) from 2013 to 2021, we find that CEOs with international experience are associated with lower financial leverage, suggesting that such leaders generally prefer less financial risk compared to their peers. We propose that this conservatism is likely due to their limited local networks and the weak institutional framework in Vietnam, which mitigate the benefits of their global expertise. Our findings support the notion from existing literature that a scarcity of social connections may cause CEOs to become more risk-averse, prompting them to choose more conservative financial decisions. 1. Introduction Research on top managers, especially CEOs, has significantly increased due to their notable influence on corporate behavior. Existing literature demonstrates how managers’ varied backgrounds shape their perspectives and strategic choices, particularly noting the role of CEOs’ international experience. Extensive research confirms that CEOs with foreign experience affect various corporate outcomes including international involvement (Sambharya, 1996), performance (Giannetti etal., 2015), social responsibility (Zhang et al., 2018), innovation (Yuan & Wen, 2018), investment efficiency (Dai et al., 2018), and tax avoidance (Wen et al., 2020). Yet, the impact of such experience on corporate risk-taking, like firm leverage decisions, is still controversial. CEOs with foreign experience may influence firm leverage in contrasting ways. On the one hand, CEO foreign experience is correlated with improved corporate governance, which might encourage the adoption of more aggressive financial policies (Giannetti et al., 2015). The ‘eyeball effect’ further posits that these CEOs under intense public and government scrutiny might pursue riskier strategies to achieve higher returns. Moreover, the challenges associated with living or studying abroad can reduce personal risk aversion, potentially increasing their willingness to take on corporate risks like higher firm leverage (Li etal., 2013). On the other hand, foreign-experienced CEOs might become more risk-averse due to the lack of robust local social networks, which are crucial for navigating domestic business environments and securing stakeholder support. This weakness can lead foreign-experienced CEOs to a more cautious approach with lower leverage (Ferris etal., 2017; Su etal., 2023). The career concern model also suggests that concerns over future career prospects might prompt foreign-experienced CEOs to avoid risks due to political motivations, leading to more conservative leverage selections. Furthermore, access to international capital markets may decrease these CEOs’ reliance on local debt, enabling them to explore less leverage-dependent financing options (Almeida & Wolfenzon, 2006). © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT thanh Huong nguyen [email protected] university of economics, the university of Danang, Da nang, Vietnam https://doi.org/10.1080/23311975.2024.2401156 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY Received 20 June 2024 Revised 17 July 2024 Accepted 1 September 2024 KEYWORDS CEO foreign experience; firm leverage; corporate governance; PSM approach; Vietnam SUBJECTS Corporate Finance; Corporate Governance; Leadership 2 T. H. NGUYEN AND P. V. HA Studying and working abroad has currently become a trend among Vietnamese, with approximately 40,000 students1 annually choosing countries like the US, UK, Australia, and other European nations for their education. In addition, in pursuit of becoming a developed country with a relatively high income by 2045, Vietnamese government policies encourage these globally experienced individuals to apply their skills domestically to aid national development.2 A 2021 survey by recruitment consultancy Robert Walters indicates that 70% of overseas Vietnamese are actively considering returning to their homeland for new job opportunities.3 Despite this emerging trend, research on the importance of foreign-experienced CEOs in Vietnam remains scare. Our study is likely to be the first in Vietnam to explore the effects of CEO foreign experience on firm leverage. Furthermore, while much existing research focuses on China, our study addresses the unique economic and cultural contexts of Vietnam, thus contributing valuable insights to the broader research field. In this study, we explore the impact of CEO overseas experience on firm leverage in Vietnam, filling the gap in the existing literature regarding CEO foreign experience in this specific market. We define CEOs with foreign experience are those who have worked and/or studied abroad before returning to Vietnam. Our analysis focuses on two measures of firm leverage: book leverage and market leverage. Using a unique, manually collected dataset of 322 non-financial firms listed on the Ho Chi Minh stock exchange (HOSE) from 2013 to 2021, we find that CEO foreign experience is significantly and negatively correlated with both types of firm leverage. This finding suggests that such CEOs are more risk-averse than their peers, potentially due to their limited local networks and Vietnam’s weak institutional framework, which may dilute the advantages of their global expertise. The absence of robust social networks can be a significant disadvantage for foreign-experienced CEOs, pushing them towards more cautious corporate decisions, including opting for lower leverage. Furthermore, unfamiliarity with the local corporate culture and management philosophies may pose challenges in garnering support from local employees, contributing to a lack of confidence and increased risk aversion among these leaders. Our research enhances the understanding of how foreign experience impacts CEO leverage decisions and contributes to the debate on the effects of such experience on corporate risk-taking. Additionally, it offers valuable insights for investors and firms considering hiring CEOs with international backgrounds, contributing to the broader literature on the Upper Echelons Theory, which asserts that a CEO’s personal attributes can influence firm behaviors. The remainder of the paper is structured as follows. Section 2 presents the related literature and hypotheses development. Section 3 describes the data and methodology. Section 4 provides empirical results and discussion, and the conclusion is presented in Section 5. 2. Literature review and hypothesis development 2.1. Literature review This paper relates to two major literature streams: the impact of CEO characteristics on firm leverage, and the role of CEOs with foreign experience in shaping corporate outcomes. 2.1.1. Impact of CEO characteristics on firm leverage The Upper Echelons Theory, introduced by Hambrick and Mason in 1984, posits that a firm’s strategic decisions and performance are significantly influenced by the observable experiences and psychological traits of its CEOs and top executives. This theory asserts that the leaders’ backgrounds, experiences, values, and personal characteristics shape their perceptions and interpretations of situations, directly impacting their strategic choices and actions (Hambrick, 2007). Due to the challenge of acquiring data on executives’ cognition, values, and perceptions (Nielsen, 2010), observable demographic attributes (e.g. education, age, tenure, and professional experience) may serve as reliable proxies for their psychological traits (Carpenter et al., 2004). Leverage is a key indicator of a firm’s riskiness, with higher levels associated with greater financial distress and default risk (Faccio etal., 2016; Molina, 2005). Previous literature shows that corporate leverage decision could be explained by CEO traits (Graham et al., 2013) such as age (e.g. Serfling, 2014), gender (e.g. Faccio etal., 2016), experience (e.g. Custódio & Metzger, 2014; Güner etal., 2008), education COGENT BUSINESS & MANAGEMENT 3 (e.g. Bertrand & Schoar, 2003), power (e.g. Korkeamäki etal., 2017), and social capital (Ferris etal., 2017). For example, Faccio et al. (2016) find that female CEOs tend to opt for lower leverage, supporting the notion that women may be less risk-tolerant and less confident than male. CEOs with higher education are less risk-averse and more receptive to new ideas, changes, and investment opportunities (Barker & Mueller, 2002), they therefore employ more aggressive financial strategies (Bertrand and Schoar, 2003), including higher financial leverage (Rakhmayil & Yuce, 2011). Ferris et al. (2017) find a positive relation between CEO social capital and financial leverage and argue that social networks enhance their risk-tolerance. Custódio and Metzger (2014) demonstrate that financial expert CEOs are likely to maintain higher debt ratio. They show that CEOs with financial experience possess skills, exhibit greater sophistication in applying finance theory, and have better access to capital markets than others, even during crisis periods (Güner et al., 2008). In the context of Vietnam, most of research focuses on the impact of firm characteristics on capital structure (e.g. Trương & Võ, 2008; Hanh, 2019). Regarding the effect of CEO characteristics on firm leverage, Minh Ha etal. (2021) use a dataset of 110 firms listed on the Ho Chi Minh Stock Exchange and the Ha Noi Stock Exchange, and document that younger CEOs, male CEOs, high experienced CEOs, and CEOs with higher education are more likely to use external financing than their counterparts. Anh and An (2023) analyze a sample of 694 Vietnamese listed firms, and show that high experienced CEOs reduce the adjustment speed toward the target leverage. Yen (2020) finds that CEO financial experience influences the relationship between cash flow volatility and capital structure. 2.1.2. The role of CEOs with foreign experience Foreign experience is one of CEOs’ observable attributes. The Upper Echelons theory suggests that CEO international experience may account for variations in firm performance and business activities (Hambrick & Mason, 1984). Previous literature shows that the presence of overseas-returned CEOs helps connect domestic firms to global markets, increasing firm export orientation (Filatotchev etal., 2009), and providing a competitive advantage in the global landscape (Carpenter & Fredrickson, 2001; Daily et al., 2000). CEOs with international experience enhance information transparency and investment efficiency (Dai et al., 2018), facilitate research and development activities, and promote corporate social responsibility initiatives (Quan etal., 2021; Yuan & Wen, 2018; Zhang etal., 2018). Giannetti etal. (2015) find that firms led by foreign-experienced CEOs exhibit higher performance compared to their counterparts. CEO overseas experience also impacts firm risk-taking behaviors, including decisions related to financial leverage. Sun et al. (2023) observe that foreign-experienced managers in Chinese firms tend to increase corporate risk-taking through higher operating leverage. They attribute this tendency to advanced management practices and improved corporate governance introduced by these CEOs. Sun et al. (2023) also find that in state owned enterprises, internationally experienced CEOs are associated with lower firm risk-taking, as they focus more on strengthening their political connections and securing future promotions rather than maximizing firm wealth. Siew-Boey and Hooy (2021) examine the influence of foreign education and working experience on CEO risk-taking behaviors within the Malaysian market. Their findings indicate that CEOs with foreign education tend to exhibit higher risk-taking with increased R&D spending and leverage. This propensity is linked to the shorter duration abroad for educational purposes, which allows foreign-experienced CEOs to retain a strong adaptation to local culture and possess higher tolerance for risks. In contrast, CEOs with foreign working experience demonstrate lower levels of risk-taking, possibly due to being less accustomed to domestic business practices and changes in the home country after a prolonged absence (Nielsen & Nielsen, 2013; Yuan & Wen, 2018). In addition, CEOs with educational backgrounds from OECD countries exhibit higher levels of risk-taking, suggesting that knowledge transfer from developed countries is particularly effective for Malaysian CEOs who have pursued their education in these countries. The role of CEOs with foreign experience in the Vietnamese market has not been extensively studied. Huong and Vu (2023) employ a dataset of non-financial firms listed on the Ho Chi Minh stock market, and indicate that firms led by internationally experienced CEOs outperform their counterparts. Focusing on the effect of foreign directors on firm performance, Nguyen (2023) finds that the presence of foreign directors on the board also improves firm performance. In contrast, Vo et al. (2020) report that firms with foreign CEOs underperform compared to those with domestic CEOs. This underperformance is attributed to the 4 T. H. NGUYEN AND P. V. HA foreign CEOs’ lack of understanding of the local culture and business environment, which is critical in a market like Vietnam where local knowledge is often key to business success. Despite these studies, no research has yet investigated the effect of CEO foreign experience on firm leverage in this emerging market. 2.2. Hypothesis development Current research presents two opposite viewpoints regarding the impact of CEO foreign experience on corporate leverage. On the one hand, existing literature shows that foreign experience enhances corporate governance (Giannetti et al., 2015), which can result in more aggressive financial policies as better governance systems encourage managers to take risks (Sun et al., 2023). In addition, from the ‘eyeball effect’ perspective, CEOs with foreign experience, who receive significant attention from the government and public, may pursue riskier strategies to achieve higher returns (Yuan & Wen, 2018). Moreover, prior studies indicate challenges and uncertainties associated with studying or living abroad (e.g. higher costs, cultural differences, and leaving one’s comfort zones) may decrease personal risk aversion (Li et al., 2013). This reduced aversion to risk may positively influence their willingness to engage in corporate risk-taking, including the adoption of higher firm leverage. On the other hand, foreign-experienced CEOs may be more risk-averse due to their limited local resources, such as social networks.4 The lack of local networks may lead foreign-experienced CEOs to adopt less risky strategies, like avoiding increased leverage. In addition, higher corporate risk due to leverage also elevates managers’ career risks with greater career turnover rates (Gilson, 1989; Nini et al., 2012) and reduced prospects for future employment (Eckbo & Thorburn, 2003; Gilson, 1989). The career concern model suggests that foreign experienced CEOs, motivated by future promotion prospects, may take fewer risks due to politically motivated career concerns. Furthermore, access to international capital markets may decrease their reliance on local debt, allowing them to consider less leverage-dependent financing options (Almeida & Wolfenzon, 2006). Vietnam is a country with the weak institutions where business heavily relies on social ties. Returnees face limited opportunities to introduce innovative and diverse experiences in Vietnamese firms, which are governed by national policies and deeply influenced by the local working culture. In addition, Vietnam’s rapid social and economic development results in swift changes that can pose challenges for foreign-experienced CEOs attempting to reintegrate into the local labor market (Pham & Saito, 2020). The lack of social connections and unfamiliarity with local culture may lead these foreign-experienced CEOs to become more risk-averse, consequently opting for more conservative financial decisions. Therefore, we hypothesize that: H1: Ceteris paribus, firms led by CEO with foreign experience display lower leverage than their counterparts. 3. Research design 3.1. Data We compile a dataset of non-financial, publicly listed firms from the Ho Chi Minh Stock Exchange (HOSE) covering 2013 to 2021. The dataset includes information on CEO characteristics such as foreign experience, age, gender, experience, and CEO duality gathered from publicly accessible corporate governance reports. Financial data are obtained from Compustat, a detailed database of financial and market information on global firms, including those in Vietnam. Consistent with prior research, we exclude financial sector firms like banks and insurance companies. The final sample includes 322 unique Vietnamese firms, yielding 2292 observations. 3.2. Model To explore the effect of CEO foreign experience on firm leverage, we employ the following OLS model: Leverage Foreign Controls it it it it , ,, , _ = + + + ++ ββ δ ϑ γζ 01 Exp ind t (1) COGENT BUSINESS & MANAGEMENT 5 where the dependent variable, Leverage I t, , refers to the leverage for firm i in year t . in our analysis, we measure firm leverage using two alternative proxies: book leverage and market leverage. the variable Foreign_Exp captures the Ceo’s foreign experience. Control variables include CEO Age , CEODuality , CEOExperience , CEOGender , Capex , Size , ROA , and SalesGrowth . to address potential biases due to unobserved heterogeneity across industries and time, we incorporate industry fixed effects ( ϑ ind ) and year fixed effects ( ‡t ) into the model. the error term of the model, denoted by ζ it ,, captures the unobserved influences on leverage that are not explained by the model variables. the definition of all variables employed in the research is summarized and presented in table 1. 3.3. Variable construction 3.3.1. Firm leverage Following previous studies (e.g. Bae et al., 2011; Berger & DeYoung, 1997), we employ two variables to measure the leverage of listed firms. Specifically, book leverage ( BLeverage ) is computed as the ratio of the book value of total debt to the book value of total assets. Market leverage ( MLeverage ) is calculated by dividing the total debt by the sum of the book value of total debt and the market value of equity. The market value of equity is determined by multiplying the total number of shares outstanding by the current stock price. 3.3.2. CEO foreign experience We build our variable of CEO foreign experience ( Foreign_Exp ) as a dummy variable. This variable equals one if the CEO of the firm has foreign experience, and zero otherwise. We define a CEO as having foreign experience if he/she worked and/or studied overseas before returning to Vietnam. 3.3.3. Control variables The model employs a number of firm-level control variables. We follow prior studies (e.g. Custódio & Metzger, 2014; Faccio et al., 2016) to control for the personal characteristics of the CEO and the firm’s attributes that have shown to influence the corporate financing choices. The variables include: • CEO Age is the age of the CEO. • CEODuality is a dummy variable, which takes the value of one if the CEO is also chairman of the board, and zero otherwise. • CEOExperience is defined as the number of years the CEO has held the CEO position at the current and previous firms. • CEOGender is a dummy variable, which takes the value of one if a firm’s CEO is female, and zero otherwise • Capex is expressed as the firm’s capital expenditure scaled by total assets. Table 1. Definition of variables. Variable Description i. Leverage BLeverage Book leverage, calculated as the ratio of the book value of total debt to the book value of total assets MLeverage Market leverage, calculated as the ratio of total debt to the sum of the book value of total debt and the market value of equity ii. Ceo characteristics Foreign_Exp Dummy variable, which takes the value of 1 if the Ceo has foreign experience, and 0 otherwise CEO Age the age of the Ceo CEODuality Dummy variable, which takes the value of 1 if the Ceo is also chairman of the board, and 0 otherwise CEOExperience the number of years the Ceo has held the Ceo position at the current and previous firms CEOGender Dummy variable, which takes the value of one if a firm’s Ceo is female, and zero otherwise iii. Firm characteristics Capex Capital expenditure scaled by total assets Size natural logarithm of the firm’s total assets ROA Return on assets SalesGrowth sales growth, calculated as the annual percentage change in the value of firm sales 6 T. H. NGUYEN AND P. V. HA • Size is calculated as the natural logarithm of the firm’s total assets. • ROA is the return on assets. • Sales Growth is computed as the annual percentage change in the firm sales. All continuous variables are winsorized at 1% at both tails to reduce the influence of outliers on the regression results. 4. Results and discussion 4.1. Summary statistics Table 2 reports the descriptive statistics of the data sample in our analysis. The average levels of book leverage and market leverage of listed firms are respectively 26.32% and 35.15%. The mean value for Foreign_Exp is 0.11, indicating that only 11% of firms are led by CEOs with foreign experience. Also, 11% of the CEOs in the sample are female. Table 1 also shows that the average age of CEOs in the sample is 50. On average, a CEO holds his/her CEO position across all firms for a duration of 6.66 years. In term of profitability, firms in the Vietnamese market exhibit an average ROA of 7.03%. The annual sales growth rate of the mean firm is 15.10%. Average capital expenditures represent 4.68% of the firms’ total assets. The Pearson correlation coefficient matrix of independent variables used in our research is presented in Table 3. The values of correlation among independent variables are low, ranging from –0.10 (correlation between CEOExperience and Capex ) to 0.45 (correlation between CEOExperience and CEO Age ). The concern about multi-collinearity, therefore, could be mitigated (Gujarati, 2003). 4.2. CEO foreign experience and firm leverage To examine whether foreign experience of CEOs exerts impacts on the corporate financing decisions, we regress our measures of firm leverage on CEO foreign experience and other drivers of firm leverage. Table 2. Descriptive statistics. Variable n Mean standard deviation Min 25th Pctl Median 75th Pctl Max BLeverage 2292 26.32 16.70 0.00 12.77 24.32 38.35 74.95 MLeverage 2292 35.15 23.03 0.20 15.43 34.19 52.34 84.55 Foreign_Exp 2292 0.11 0.31 0 0 0 0 1 CEO Age 2224 49.63 8.21 24 44 50 56 78 CEO Duality 2292 0.24 0.42 0 0 0 0 1 CEO Experience 2247 6.66 6.13 0 2 5 10 37 CEO Gender 2283 0.11 0.31 0 0 0 0 1 Capex 2285 4.68 6.14 0 0.58 2.33 6.26 32.28 Size 2292 28.32 1.35 25.50 27.36 28.15 29.11 33.69 ROA 2279 7.03 5.88 −11.40 3.39 6.07 9.57 32.56 Sales Growth 1970 15.10 52.66 −72.91 −9.04 7.11 23.35 314.39 Table 3. Pearson correlation coefficient matrix of independent variables. Variable Foreign Exp _ CEO Age CEO Duality CEO Experience CEO Gender Capex Size ROA Sales Growth Foreign Exp _1 CEO Age 0.07*** 1 CEO Duality 0.09*** 0.16*** 1 CEO Experience 0.09*** 0.45*** 0.30*** 1 CEO Gender 0.09*** −0.07*** 0.09*** 0.10*** 1 Capex −0.06*** −0.04* −0.05** −0.10*** 0.04* 1 Size 0.17*** 0.04* −0.09*** −0.02 0.09*** 0.08*** 1 ROA 0.05** 0.08*** −0.03 −0.01 0.01 0.14*** 0.05** 1 Sales Growth −0.001 −0.07*** 0.04 −0.01 −0.01 0.05** 0.07*** 0.10*** 1 COGENT BUSINESS & MANAGEMENT 7 Estimation results are reported in Table 4. Book leverage is the dependent variable in Panel A and market leverage is the dependent variable in Panel B. We find that the coefficient estimates for Foreign_Exp are negative and statistically significant in all columns. After accounting for the impact of other determinants of capital structure choices, the book (market) leverage of firms led by foreign-experienced CEOs is 3.71% (6.29%) lower than the book (market) leverage of firms run by CEOs lacking this experience. This result is in line with Siew-Boey and Hooy (2021) and Sun et al. (2023), and supports H1 which predict a negative relation between the foreign experience of CEOs and firm leverage. In the context of an emerging country with the weak legal institutions like Vietnam, the lack of social networks might be the dominant disadvantage that takes foreign-experienced CEOs to more prudent corporate decisions including lower leverage choices. In addition, being unfamiliar with corporate culture and management philosophy might lead them to face difficulties in gaining support from local employees, making them less confident and more risk-averse. In terms of other CEO characteristics that might affect the firms’ leverage, the results show that, consistent with prior studies, CEO experience tends to be associated with lower debt ratio (e.g., Custódio & Metzger, 2014). By contrast, younger CEO tend to adopt lower firm leverage, in line with previous research suggesting that these CEOs face greater risk of being fired following poor performance (e.g., Chevalier & Ellison, 1999; Hong et al., 2000). The results also show that CEO duality is positively correlated with firm leverage. As for firm attributes, we find that larger firms, firms with higher growth opportunities and capital expenditures tend to have higher leverage. In the meanwhile, firms with high profitability are likely to borrow less than other firms (Faccio et al., 2016). 4.3. Robustness checks To enhance the robustness of our findings, we conduct additional tests addressing endogeneity, including the use of lagged military experience and propensity score matching method. We also re-evaluate our models using data from both before and during the COVID-19 pandemic to account for potential distortions caused by the crisis. Table 4. impact of foreign-experienced Ceos on firm leverage. Panel a: Panel B: Variable BLeverage BLeverage MLeverage MLeverage (1) (2) (1) (2) Foreign Exp _−2.28** (−2.03) −3.71*** (−3.30) −5.99*** (-4.03) −6.29*** (−4.41) CEO Age 0.20*** (3.97) 0.12* (1.83) CEO Duality 2.83*** (3.17) 4.43*** (3.81) CEO Experience −0.33*** (−5.35) −0.31*** (−3.44) CEO Gender 0.07 (0.06) −0.25 (-0.18) Capex 0.30*** (5.02) −0.02 (−0.23) Size 2.65*** (9.78) 2.38*** (6.64) ROA −0.77*** (−13.62) −1.89*** (−23.59) Sales Growth 0.01 (1.20) 0.02* (1.81) Constant 29.23*** (18.26) −50.54*** (-6.20) 23.31*** (13.08) −33.44*** (-3.15) R 2 (%) 7.82 20.45 6.14 28.76 Observations 2,292 1,863 2,292 1,863 Industry FEs Yes Yes Yes Yes Year FEs Yes Yes Yes Yes note: t-statistics are in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels.