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CEO inside debt and corporate debt maturity structure

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  • Dang, Viet A.
  • Phan, Hieu V.

Abstract

This paper examines the relation between chief executive officer (CEO) inside debt holdings and corporate debt maturity. We provide robust evidence that inside debt has a positive effect on short-maturity debt and that this effect is concentrated in financially unconstrained firms that face lower refinancing risk. Our analysis further shows that CEO inside debt helps reduce the cost of debt financing. Overall, our results indicate that managerial holdings of inside debt facilitate access to external debt financing and reduce refinancing risk, thus incentivizing managers to use less costly shorter term debt.

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  • Dang, Viet A. & Phan, Hieu V., 2016. "CEO inside debt and corporate debt maturity structure," Journal of Banking & Finance, Elsevier, vol. 70(C), pages 38-54.
    • Handle: RePEc:eee:jbfina:v:70:y:2016:i:c:p:38-54
    DOI: 10.1016/j.jbankfin.2016.05.009
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    More about this item

    Keywords

    Debt maturity; Short-term debt; Inside debt; Pension; Deferred compensation;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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