The dark side of CEO inside debt: Evidence from stock price crash risk

IF 5.9 1区经济学 Q1 BUSINESS, FINANCE

Journal of Corporate Finance Pub Date : 2025-08-05 DOI:10.1016/j.jcorpfin.2025.102860

Amir Gholami, Ahmed Elnahas

引用次数: 0

Abstract

Despite being thought of as a governance mechanism, CEO inside debt seems to distort firms' information environment. Our results indicate that CEO inside debt alters managerial orientation and incentives in a way that increases stock price crash risk. Our results are robust after addressing endogeneity using the instrumental variable (IV) approach, a difference-in-differences test based on the implementation of Internal Revenue Code Section 409 A Final Regulations, and Oster's omitted variable diagnostic test, and selection bias using the propensity score matching (PSM) and Entropy balancing (EB) approaches. The results are stronger for firms that are poorly governed, operate in less competitive industries, have lower institutional ownership, have higher information asymmetry, and pay less dividends. Further, the results are robust to controlling for CSR, local religiosity, tax avoidance, financial opacity, CEO power, and CEO as well as local political ideology.

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CEO内部债务的阴暗面：来自股价崩盘风险的证据

尽管CEO内部债务被认为是一种治理机制，但它似乎扭曲了企业的信息环境。我们的研究结果表明，CEO内部债务在某种程度上改变了管理层的取向和激励，增加了股价崩溃的风险。在使用工具变量（IV）方法、基于《国内税收法》第409a条最终条例实施的差异中差异检验、Oster省略的变量诊断检验以及使用倾向得分匹配（PSM）和熵平衡（EB）方法解决内质性问题后，我们的结果是稳健的。对于治理不善、处于竞争较弱的行业、机构所有权较低、信息不对称较高、支付股息较少的公司，结果更为明显。此外，研究结果对企业社会责任、地方宗教信仰、避税、财务不透明、CEO权力以及CEO和地方政治意识形态的控制具有鲁强性。

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

Journal of Corporate Finance BUSINESS, FINANCE-

CiteScore

11.80

自引率

3.30%

发文量

期刊介绍： The Journal of Corporate Finance aims to publish high quality, original manuscripts that analyze issues related to corporate finance. Contributions can be of a theoretical, empirical, or clinical nature. Topical areas of interest include, but are not limited to: financial structure, payout policies, corporate restructuring, financial contracts, corporate governance arrangements, the economics of organizations, the influence of legal structures, and international financial management. Papers that apply asset pricing and microstructure analysis to corporate finance issues are also welcome.