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explores the impact of CEO power or CEO dominance on bond ratings and yield spreads. We find that credit ratings are lower and … higher yields because it is difficult for them to monitor managers in firms with powerful CEOs. Taken together, the results … suggest that bondholders perceive CEO power as a critical determinant of the cost of bond financing …
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We explore the effect of director social capital, directors with large and influential networks, on credit ratings. Using a sample of 11,172 firm-year observations from 1999 to 2011, we find that larger board networks are associated with higher credit ratings than both firm financial data and...
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We explore the impact of director social capital on credit ratings. Social capital is often associated with trust and cultivated through one's personal networks. We show that firms which employ well-connected directors benefit with a higher credit rating. This result is amplified for firms that...
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We consider a model in which productive bilateral links are formed between heterogeneous agents who differ in their innate productivity. Local information is complete but an outside planner can observe only network properties. We ask if consistent credit rating -- where agents' ratings are...
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