Do Decision Makers' Debt-risk Attitudes Affect the Agency Costs of Debt?



Current Agriculture, Food & Resource Issues

G. Hailu, E. W. Goddard and S. R. Jeffrey

business expansion ..., using a 7-point Likert scale response from “very strongly
disagree” to “ very strongly agree”. Each individual’s responses are indexed from -3 to +3
and used as the
motivation to comply measure. Individuals are then asked to respond to
another series of statements, such as,
Doing what my colleagues think is ..., again using a
7-point Likert scale response from “very unlikely” to “very likely”. Their responses are
indexed numerically from 1 to 7 and used as the
normative beliefs measure. The products
of
motivation to comply and normative beliefs are summed over all of the statements to
obtain an overall subjective norm index. Table 2 provides a summary of the statements
from the survey and numerically indexed responses for a sample respondent, to illustrate
the method used. In this case, the overall subjective norm index value is -8. This person’s
subjective norm toward increasing borrowing is, then, predicted to be negative.

Table 2 Subjective Norms (Sample Respondent)

Referents

Motivation to comply

Normative beliefs4

Products

1.

Colleagues

1

0

0

2.

Shareholders/members

-1

1

-1

3.

Senior management

0

2

0

4.

Boards of directors

1

2

2

5.

Spouse

-3

3

-9

6.

Friends

0

0

0

7.

Parents

0

0

0

Sum

-8

To measure perceived behavioural control, individuals are asked to respond to a series
of statements, such as,
If I want to have more decision making power I can easily find out,
using a 7-point Likert scale response from “very strongly disagree” to “very strongly
agree”. An individual’s responses are indexed from -3 to +3 and used as the
perceived
behavioural facilitation
measure. Individuals are then asked to respond to another series
of statements, such as,
I could approve long-term debt to finance business expansion more
easily if I had more decision making power
, again using a 7-point Likert scale response
from “very unlikely” to “very likely”. The responses are indexed numerically from 1 to 7
and used as the
control beliefs measure. The products of perceived behavioural
facilitation
and control beliefs are summed over all of the statements to obtain an overall
perceived behavioural control index. Table 3 provides a summary of the statements from
the survey and numerically indexed responses for a sample respondent, to illustrate the
method used. The overall subjective norm index value in this case is -12. This person’s
perceived behavioural control toward increasing borrowing is, then, predicted to be
negative.

70



More intriguing information

1. The name is absent
2. PROTECTING CONTRACT GROWERS OF BROILER CHICKEN INDUSTRY
3. BODY LANGUAGE IS OF PARTICULAR IMPORTANCE IN LARGE GROUPS
4. The name is absent
5. The name is absent
6. EXPANDING HIGHER EDUCATION IN THE U.K: FROM ‘SYSTEM SLOWDOWN’ TO ‘SYSTEM ACCELERATION’
7. Evaluation of the Development Potential of Russian Cities
8. Pricing American-style Derivatives under the Heston Model Dynamics: A Fast Fourier Transformation in the Geske–Johnson Scheme
9. Beyond Networks? A brief response to ‘Which networks matter in education governance?’
10. Fiscal Rules, Fiscal Institutions, and Fiscal Performance
11. Integration, Regional Specialization and Growth Differentials in EU Acceding Countries: Evidence from Hungary
12. TINKERING WITH VALUATION ESTIMATES: IS THERE A FUTURE FOR WILLINGNESS TO ACCEPT MEASURES?
13. Visual Artists Between Cultural Demand and Economic Subsistence. Empirical Findings From Berlin.
14. Ventas callejeras y espacio público: efectos sobre el comercio de Bogotá
15. Reform of the EU Sugar Regime: Impacts on Sugar Production in Ireland
16. PROFITABILITY OF ALFALFA HAY STORAGE USING PROBABILITIES: AN EXTENSION APPROACH
17. Perfect Regular Equilibrium
18. Flatliners: Ideology and Rational Learning in the Diffusion of the Flat Tax
19. The name is absent
20. Modeling industrial location decisions in U.S. counties