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Abstract This study examines the impact of Chief Executive Officer (CEO) network centrality on bond ratings at the firm level. Using multiple dimensions of social connectedness, we find a significant… Click to show full abstract
Abstract This study examines the impact of Chief Executive Officer (CEO) network centrality on bond ratings at the firm level. Using multiple dimensions of social connectedness, we find a significant positive relation between CEO network centrality and bond ratings, suggesting that firms with better connected CEOs are more likely to receive high bond ratings. Our results still hold after a battery of additional tests. We also find that firms with better connected CEOs experience lower cost of debt. Overall, our study supports the notion in social science research that well-connected individuals can bring benefits to their firms.
Journal Title: Advances in Accounting
Year Published: 2017
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