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Corporate Governance and Capital Structure Decision: A Conceptual Review

Laura L. Adams & B. E. A. Jayasekara

Journal of Business Studies2024https://doi.org/10.4038/jbs.v11i1.104review
ABDC C
Weight
0.42

What the paper says

Corporate governance and capital structure decisions are critical determinants of a firm’s financial performance, risk management, and long-term sustainability. This conceptual review synthesizes existing literature to examine the interplay between governance mechanisms and financing choices. Drawing upon theories such as agency theory, trade-off theory, and stakeholder theory, this paper explores how governance structures—board composition, ownership concentration, and regulatory frameworks—shape capital structure decisions. Strong governance mechanisms enhance financial discipline, optimize debt-equity balance, and mitigate agency conflicts, whereas weak governance leads to suboptimal financing choices and financial distress. The review also highlights emerging trends, including ESG considerations, digital transformation, and AI-driven governance, which are reshaping traditional governance-financing paradigms. The study identifies key gaps in the literature and suggests future research directions, particularly in governance innovations, AI-based financial decision-making, and regulatory influences on capital structure strategies. This paper provides a foundation for understanding how firms can strengthen governance frameworks to enhance financial stability and shareholder value.

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https://doi.org/https://doi.org/10.4038/jbs.v11i1.104

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@article{laura2024,
  title        = {{Corporate Governance and Capital Structure Decision: A Conceptual Review}},
  author       = {Laura L. Adams & B. E. A. Jayasekara},
  journal      = {Journal of Business Studies},
  year         = {2024},
  doi          = {https://doi.org/https://doi.org/10.4038/jbs.v11i1.104},
}

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Evidence weight

0.42

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.29 × 0.4 = 0.11
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.