Generalist CEOs and Credit Ratings*
成果类型：
Article
署名作者：
Ma, Zhiming; Ruan, Lufei; Wang, Danye; Zhang, Haiyan
署名单位：
Peking University; California State University System; San Francisco State University; New York University; Tsinghua University
刊物名称：
CONTEMPORARY ACCOUNTING RESEARCH
ISSN/ISSBN：
0823-9150
DOI：
10.1111/1911-3846.12662
发表日期：
2021
页码：
1009-1036
关键词：
摘要：
A recent trend is that firms prefer to hire generalist CEOs with transferable skills (across firms or industries) over hiring specialist CEOs, but the consequences of this trend are unclear. In this study, we examine whether credit rating agencies consider a CEO's general skills as a credit risk factor when assessing an entity's overall creditworthiness. We predict and find that generalist CEOs are associated with lower credit ratings, suggesting that the presence of generalist CEOs is a significant credit rating factor. We also find that generalist CEOs are likely to take on more risks, which leads to more volatile performance ex post, and our path analyses confirm default risk is a significant mediator between credit ratings and CEOs' general skills. Our results hold in the presence of additional controls (e.g., CEO characteristics and corporate governance), when applying different fixed-effect models and different matching methods, and for a subsample with forced CEO turnover. We also find that the negative relationship is attenuated for R&D-intensive firms and firms in competitive industries. Last, we provide evidence that firms with generalist CEOs face higher borrowing costs, such as bond yields and syndicated loan spreads. Overall, our results contribute to a growing literature on the costs and benefits of hiring generalist CEOs, by providing a full picture of why hiring a generalist CEO may benefit shareholders but also cause misalignments with bondholders' interests.
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