Perceived corporate individualism culture and corporate bond issuing costs

Abstract

This paper investigates whether the perceived individualism culture of corporate executives influences U.S. primary bond market pricing. Corporate individualism culture is assessed through the cultural inheritance of executives, inferred from their surnames. Analyzing a sample of 4690 U.S. bonds issued by 675 firms between 2000 and 2021, this study finds a significant and positive relationship between corporate individualism culture and bond issuance costs, even after controlling for firm- and year-fixed effects. Moreover, the impact of a strong corporate individualism culture on bond issuance costs is more pronounced in firms experiencing high financial distress and weak corporate governance.