Behind closed doors: unveiling the effect of insider CEOs on corporate debt costs

Iman Harymawan, Mohammad Nasih, Yani Permatasari, Adib Minanurohman and Grantley Taylor

Accounting Research Journal, 2025, vol. 38, issue 3-4, 343-363

Abstract: PurposeThe purpose of this study is to examine the relationship between insider CEOs and the cost of debt (COD).Design/methodology/approachThis study uses the ordinary least squares regression method with a sample of non-financial public companies listed on the Indonesia Stock Exchange during the period 2012–2020.FindingsThe findings of this study reveal a significant positive relationship between insider CEOs and the COD. This implies that companies with insider CEOs tend to have higher costs of debt. These results are further supported by the coarsened exact matching and lagged regression analysis, as well as enriched with various additional analyses.Research limitations/implicationsThis study is limited to a sample of companies in Indonesia, and its findings may not be generalized to the context of developed countries. Nevertheless, this research contributes to a better understanding of the complex relationship between insider CEOs and the COD for companies.Originality/valueTo the best of the authors’ knowledge, this paper is one of the first studies to examine the relationship between insider CEOs and the COD, contributing valuable insights to this emerging area of research.

Keywords: Insider CEO; Cost of debt; Governance; CEO appointment (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-06-2024-0233

DOI: 10.1108/ARJ-06-2024-0233

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