The Effect of Free Cash Flow on the Relationship Between Managerial Entrenchment and Debt: Evidence From French Firms

Aida GUERMAZI, Abdelfettah BOURI


At first, this paper examines the association between managerial entrenchment and corporate leverage in French case. Then, the effect of free cash flow in this relationship is investigated. Using a sample of 98 listed French companies in Euronext Paris from 2000 to 2014, it was found that CEO entrenchment is related positively to debt before financial crisis and negatively after crisis. Also, free cash flow moderates the relationship between CEO entrenchment and corporate debt before crisis.

Keywords: CEO Entrenchment- Debt- Free Cash-Flow- moderator variable

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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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