Marital Status of CEOs and Firms’ Default Risk

This study investigates the effect of CEOs' marital status on firms' default risk. Using the marital status and default risk data for the US companies from 1992 to 2015, we show that firms led by single CEOs have higher default risk. The effect is economically significant. Our results survive the battery of robustness tests, implying that they are not driven by innate heterogeneity in preferences. We test various channels that can plausibly explain our results. We also show that governance mechanisms such as board independence and institutional ownership effectively minimise firms' default risk led by single CEOs