Beyond the balance sheet: Assessing corporate governance through the Lens of debtholders

IF 7.5 1区经济学 Q1 BUSINESS, FINANCE

International Review of Financial Analysis Pub Date : 2024-09-26 DOI:10.1016/j.irfa.2024.103625

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Abstract

This study investigates the relationships between economic uncertainty (EU), corporate governance (CG), and the cost of debt (COD). Using an index-based measure of CG, this study investigates how CG influences debtholders' perspectives during periods of EU. The study utilizes a dataset of nonfinancial firms listed in European countries from 2013 to 2021. We find that EU and COD are positively associated, indicating that EU increases the COD of European firms. Second, while CG has an insignificant direct impact on COD, it has a significant negative moderating impact on the relationship between EU and COD, suggesting that although a strong CG system may not have a significant direct impact on COD, it has the potential to reduce the uncertainty-induced COD of European firms. The results remain consistent with alternative proxies of COD and CG, as well as before and after the COVID-19 period. The results for CG subindices suggest that shareholder rights and compensation serve as reliable indicators for debtholders during periods of EU, while audit quality and board structure do not play any significant role in reducing uncertainty-induced COD. Our findings emphasize the key role that effective CG plays in mitigating EU's adverse effects on COD. Our results are robust to endogeneity issues such as reverse causality and selection bias, as well as to external factors like time and industry effects.

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超越资产负债表：从债务人的视角评估公司治理

本研究探讨了经济不确定性（EU）、公司治理（CG）和债务成本（COD）之间的关系。本研究使用基于指数的公司治理衡量标准，探讨了在欧盟时期，公司治理如何影响债务人的观点。研究使用了 2013 年至 2021 年在欧洲国家上市的非金融企业数据集。我们发现，欧盟与公司债务可持续性呈正相关，表明欧盟会增加欧洲公司的债务可持续性。其次，虽然企业管治对公司业绩增长的直接影响不显著，但它对欧盟和公司业绩增长之间的关系有显著的负向调节作用，这表明尽管强大的企业管治体系可能不会对公司业绩增长产生显著的直接影响，但它有可能减少不确定性引起的欧洲公司业绩增长。这些结果与 COD 和 CG 的其他替代指标以及 COVID-19 期间前后的结果保持一致。公司治理子指数的结果表明，在欧盟时期，股东权益和薪酬是债务人的可靠指标，而审计质量和董事会结构在减少不确定性引起的公司责任丧失方面没有发挥任何重要作用。我们的研究结果强调了有效的企业管治在减轻欧盟对债务人债务违约的不利影响方面所起的关键作用。我们的结果对反向因果关系和选择偏差等内生性问题以及时间和行业效应等外部因素都是稳健的。

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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来源期刊

International Review of Financial Analysis BUSINESS, FINANCE-

CiteScore

10.30

自引率

9.80%

发文量

366

期刊介绍： The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.