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

Sabri Boubaker, Kaouther Chebbi and Jocelyn Grira

The Quarterly Review of Economics and Finance, 2020, vol. 78, issue C, 98-115

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.

Keywords: Ethics in finance; Corporate social responsibility; CEO inside debt (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:78:y:2020:i:c:p:98-115

DOI: 10.1016/j.qref.2019.12.001

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