Does Managerial Education Matter for Credit Risk? Evidence from Taiwan

Thi Bao Ngoc Nguyen, Li-Feng Lin, Xuan-Qi Su and Jui-Hung Yu

Finance Research Letters, 2021, vol. 41, issue C

Abstract: This paper tests how managerial educational level (MEL) determines corporate credit risk (CCR) using a sample of listed Taiwanese firms from 2006 to 2018. Results indicate that controlling for a variety of firm fundamentals and corporate governance effects, a higher MEL is itself associated with a higher credit rating score (i.e., a lower CCR). Such a negative MEL–CCR association is more evident for firms operating in low-competition or monopolistic industries. The overall results are supported by relevant hypotheses associated with MEL, i.e., the productivity-related human capital hypothesis, knowledge-related earnings quality hypothesis, and reputation-related organizational legitimacy hypothesis.

Keywords: Managerial Education; Corporate Credit Risk; Corporate Governance; Industry Competition (search for similar items in EconPapers)
JEL-codes: G32 G34 I25 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:41:y:2021:i:c:s1544612320316263

DOI: 10.1016/j.frl.2020.101812

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