Foreign‐Experienced Independent Directors and Leverage Manipulation in China

This study finds that foreign‐experienced independent directors play a significant governance role in mitigating corporate leverage manipulation among Chinese listed firms. Using panel data from 2008 to 2023, the analysis shows that their presence on boards is associated with lower levels of leverage manipulation, primarily through improving information disclosure quality and reducing information asymmetry. The effect is stronger in firms with a high level of financing constraints, firms with a higher proportion of short‐term institutional investors, and firms in competitive industries. These findings highlight the importance of global experience in board composition while recognizing potential challenges such as cultural and institutional unfamiliarity, underscoring the need for context‐sensitive governance policies to enhance financial transparency and stability.