CEO ability heterogeneity, board’s recruiting ability and credit risk

Tsung-Kang Chen, Hsien Hsing Liao*, Wen Hsuan Chen

*此作品的通信作者

研究成果: Article同行評審

12 引文 斯高帕斯(Scopus)

摘要

This study investigates the effects of the CEO (Chief Executive Officer) ability heterogeneity of an industry and the board’s recruiting capability on firm credit risk by using 26,235 America bond data from the year 2001 to 2014. We find that both CEO ability heterogeneity and board’s recruiting ability enhance a firm’s credit quality when controlling for other well-known determinants of bond yield spreads, implying that high CEO ability heterogeneity and good board’s recruiting ability both encourage a firm to replace the underperformed CEO earlier and improve the firm’s subsequent performance, which enhances firm value and credit quality (Merton in J Finance 29(2):449–470, 1974). We also find that good macroeconomic conditions weaken the effect of CEO ability heterogeneity on bond yield spreads while enhance that of board’s recruiting ability. Moreover, board’s recruiting ability weakens the effect of CEO ability heterogeneity on bond yield spreads, indicating that there may exist a trade-off relationship between the CEO ability heterogeneity effect and the board’s recruiting ability effect. Finally, the results are robust when considering endogeneity issues and other measures of CEO ability heterogeneity.

原文English
頁(從 - 到)1005-1039
頁數35
期刊Review of Quantitative Finance and Accounting
49
發行號4
DOIs
出版狀態Published - 1 11月 2017

指紋

深入研究「CEO ability heterogeneity, board’s recruiting ability and credit risk」主題。共同形成了獨特的指紋。

引用此