Corporate political transparency and the cost of debt

D. G. DeBoskey (), Yutao Li (), Gerald J. Lobo () and Yan Luo ()
Additional contact information
D. G. DeBoskey: San Diego State University
Yutao Li: University of Lethbridge
Gerald J. Lobo: University of Houston
Yan Luo: San Diego State University

Review of Quantitative Finance and Accounting, 2021, vol. 57, issue 1, No 5, 145 pages

Abstract: Abstract We examine the relation between borrowing firms’ corporate political transparency and the cost of debt. Using a sample of S&P 500 firms over the 2012–2016 period, we document a significant negative association between firms’ corporate political transparency and their cost of debt. We also find that the negative association is more pronounced when the borrowing firms are in less unionized industries and have younger executives (CEOs or board of directors). Our results are robust to a variety of sensitivity tests.

Keywords: Corporate political activities; Corporate political transparency; Cost of debt; Risk taking; Conflict of interest between shareholders and creditors; Syndicated loan market (search for similar items in EconPapers)
JEL-codes: C12 G30 M41 N22 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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DOI: 10.1007/s11156-020-00941-6

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