Top management inside debt and corporate social responsibility? Evidence from the US

Sabri Boubaker, Kaouther Chebbi, Jocelyn Grira

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)

Abstract

This study provides evidence on the relationship between CEO inside debt and corporate social responsibility (hereinafter, CSR). We find that an increase in CEO inside debt leads to high levels of CSR. This finding is robust to controlling for the sensitivity of CEO equity compensation to volatility as well as to alternative measures of CSR. We also find that CEO inside debt is directly related to firms’ primary stakeholders (Community, Diversity, Employee Relations, Environment, and Product Characteristics). Our results are in line with the risk mitigation hypothesis and shed more light on CSR as a channel through which managers with more inside debt tend to respond to debtholders’ demands as their appetite for risk decreases.

Original languageEnglish
Pages (from-to)98-115
Number of pages18
JournalQuarterly Review of Economics and Finance
Volume78
DOIs
Publication statusPublished - Nov 2020
Externally publishedYes

Keywords

  • CEO inside debt
  • Corporate social responsibility
  • Ethics in finance

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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