CEO inside debt holdings and credit ratings

IF 2.9 3区管理学 Q2 BUSINESS, FINANCE Journal of Contemporary Accounting & Economics Pub Date : 2023-04-01 DOI:10.1016/j.jcae.2022.100337

Mostafa Monzur Hasan , Ashrafee Hossain , Takdir Hossain

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引用次数: 3

Abstract

In this paper we investigate the relationship between chief executive officer (CEO) inside debt holdings (pension benefits and deferred compensation) and long-term credit ratings. We provide evidence that firms with a higher level of inside debt holdings enjoy better credit ratings. Our results are robust to the use of alternative regression estimation and alternative measures of key variables. We employ instrumental variable–based two-stage least squares regression and instrumental variable regression estimation using heteroskedasticity-based instruments to mitigate the endogeneity concern. In addition, we employ propensity-matched sample and entropy balancing estimates to alleviate endogeneity concerns. Our cross-sectional analyses reveal that the relationship between CEO inside debt holdings and credit ratings is more pronounced in firms with a poor information environment, a weak monitoring mechanism, and powerful CEOs. Overall, findings from our study suggest that credit rating agencies evaluate CEO insider debt holdings positively in assessing the creditworthiness of a firm.

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首席执行官内部债务持有和信用评级

本文研究了首席执行官内部债务持有(养老金福利和递延薪酬)与长期信用评级之间的关系。我们提供的证据表明，内部债务持有水平较高的公司享有更好的信用评级。我们的结果对于使用替代回归估计和关键变量的替代度量是稳健的。我们采用基于工具变量的两阶段最小二乘回归和基于异方差的工具变量回归估计来减轻内生性问题。此外，我们采用倾向匹配样本和熵平衡估计来减轻内生性问题。我们的横断面分析表明，在信息环境差、监督机制弱、CEO权力大的企业中，CEO内部债务持有与信用评级之间的关系更为明显。总体而言，我们的研究结果表明，信用评级机构在评估公司的信誉度时，对CEO内部债务持有情况的评价是积极的。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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