Criminals, bankruptcy, and cost of debt

• 成果类型: Article
• 署名作者: Regenburg, Kasper; Seitz, Morten Nicklas Bigler
• 署名单位: Copenhagen Business School
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-021-09608-6
• 发表日期: 2021
• 页码: 1004-1045
• 关键词: managerial ability; FINANCIAL RATIOS; UPPER ECHELONS; corporate; attitudes; FIRMS; CEOS; performance; misconduct; prediction

摘要

We examine whether criminal records of CEOs and rank-and-file employees are associated with firms' likelihood of bankruptcy, and whether lenders adjust their required cost of debt accordingly. We use a nationwide sample of private firms and criminal registers covering all firm employees. We find that the likelihood of bankruptcy is positively associated with the CEO's criminal record and the proportion of employees with criminal records. We find some, though less robust, evidence that lenders price a firm's loan higher when the firm's CEO has a criminal record and when more of the employees have criminal records. The results suggest that the characteristics of firm employees represent a risk that, to some extent, is priced by lenders.