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Effects of CEO inside debt on corporate ESG behavior: role of major shareholders

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  • Fan, Ruoyu
  • Ren, Ziming

Abstract

This study examines the connection between CEOs’ inside debt holdings and corporate ESG performance. Using a sample of publicly listed Chinese firms from 2013 to 2023, we provide strong evidence that inside debt positively influences corporate ESG performance, though this effect is diminished by the presence of large shareholders. Our analysis also shows that CEO inside debt improves ESG performance by lowering debt financing costs and enhancing the quality of financial reporting. These findings remain consistent across various sensitivity and endogeneity tests. Overall, this research makes a meaningful contribution to the rapidly expanding literature on inside debt and ESG.

Suggested Citation

  • Fan, Ruoyu & Ren, Ziming, 2025. "Effects of CEO inside debt on corporate ESG behavior: role of major shareholders," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007214
    DOI: 10.1016/j.frl.2025.107462
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    References listed on IDEAS

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    Cited by:

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