Social capital and cost of debt: Evidence from Chinese CEO network centrality

Yiping Chen, Yuan George Shan, Jimin Wang, Xinxin Yang and Junru Zhang

Emerging Markets Review, 2024, vol. 60, issue C

Abstract: Using a unique dataset comprising 6313 firm-year observations for Chinese listed firms between 2008 and 2017, we investigate the impact of CEO social capital on cost of debt. Our results show that CEO social capital is negatively related to cost of debt, and the impact of CEO social capital in environments with a low degree of marketization or social trust is more pronounced than in environments with a high degree of marketization or social trust. Moreover, our results reveal that two potential mechanisms, discretionary accruals and information disclosure quality, mediate the impact of CEO social capital on cost of debt.

Keywords: Social capital; Cost of debt; Network centrality; Mediation effect; Information asymmetry; China (search for similar items in EconPapers)
JEL-codes: D85 G30 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:60:y:2024:i:c:s1566014124000268

DOI: 10.1016/j.ememar.2024.101131

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