Bias incidents in the workplace can create a pattern of behavior that damages organizational climate not only for victims but also bystanders who witness these incidents. Using incivility and threat ridigity research as a guiding framework, we explore the mitigating potential of bystander intervention on the relationship between bias incidents and witnesses' perceived workplace climate and intention to leave. We developed and tested a moderated mediation model using time-lagged ordinary least squares (OLS) regression with data from organizational climate surveys administered annually from 2014 to 2017. Results confirmed that bias incidents increase turnover intentions through their negative effect on workplace climate. More importantly, the expectation that faculty colleagues will intervene if a bias incident occurs mitigates the negative impact of bias incidents on workplace climate. Our findings suggest that raising awareness about bias incidents, encouraging colleagues to intervene when bias incidents occur, and, most critically, fostering a culture in which intervention is expected have great potential for improving workplace climate and reducing employee turnover. This is the first research study that provides empirical evidence of the potential for bystander intervention expectations to mitigate the negative effect of bias incidents on workplace climate.

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PurposeThis study seeks to identify the main determinants of the optimal capital structure by reexamining the interpretation of the conventional set of explanatory variables used as proxies for the costs and benefits of debt in the context of the dynamic tradeoff theory.Design/methodology/approachThe authors isolate the variation in leverage due to different targets from that caused by deviations by aggregating the data across a dimension identifying firms with similar targets – credit rating category.FindingsContrary to theoretical priors, large and profitable rated firms have lower targets. The authors show that size and profitability proxy for non-financial risk and that, for rated firms, non-financial risk is positively correlated to the optimal leverage. The benefits of a better rating outweigh the costs of foregone tax shields for firms with relatively low non-financial risk. The authors find support for that theory in institutional trading – institutional investors do not punish highly rated firms when credit downgrades occur.Originality/valueThis paper contributes to the capital structure literature by developing a new approach based on data aggregation. This study is the first, to the authors’ knowledge, to find a positive effect of the firm's non-financial risk on target leverage among rated firms. The authors argue that the benefit of a better credit rating is an increasing function of the rating itself. The authors also contribute to the literature on the impact of credit ratings on the capital structure choices of the firm.

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Firm fixed effects in panel leverage regressions act as a noisy proxy for managerial effects that drive persistence in leverage. Firms that do not change their chief executive officer (CEO) for prolonged periods of time are more likely to keep debt ratios within a narrow bandwidth and to display persistent differences in their time‐series averages for up to 20 years. A CEO turnover is associated with considerable modifications to the financing policy of the firm. Significant capital structure changes take place immediately after a new executive takes office and leverage ratios remain relatively stable for the remaining tenure of the CEO.