CEO Inside Debt and Employee Workplace Safety

Xuan Wu (), Yueting Li () and Yangxin Yu ()
Additional contact information
Xuan Wu: School of Economics and Management, Harbin Institute of Technology, Shenzhen
Yueting Li: Postdoctoral Innovation & Practice Base, Shenzhen Investment Holdings Co., Ltd.
Yangxin Yu: City University of Hong Kong

Journal of Business Ethics, 2023, vol. 182, issue 1, No 10, 159-175

Abstract: Abstract Theoretical studies suggest that, when determining the workplace safety level, CEOs face a trade-off between ex ante safety-improving expenditures and the expected losses due to ex post injury and illness occurrences. We examine whether firms with higher CEO inside debt holdings have safer workplaces. Using establishment-level employee workplace injury and illness data, we find that CEOs’ inside debt holdings are negatively associated with employee workplace injury and illness cases. This relationship is more pronounced if workers’ compensation premiums are more sensitive to injury claims and for firms with more government business and less pronounced for firms with higher levels of secured debt. We provide some evidence that our main result stems from CEOs increasing safety investments. Our empirical results are shown to be robust under a batch of robustness tests and when considering potential endogeneity problems. Our findings suggest that CEOs with higher levels of inside debt holdings are more sensitive to wealth loss due to employee injury and illness, leading to a safer workplace.

Keywords: CEO inside debt; Firm operational risk; Workplace safety (search for similar items in EconPapers)
JEL-codes: G30 J28 K32 M41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-021-05033-6 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:182:y:2023:i:1:d:10.1007_s10551-021-05033-6

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-021-05033-6

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().