Porth Ymchwil

Credit Ratings and Capital Structure: New Evidence from Overconfident CFOs

Allbwn ymchwil: Cyfraniad at gynhadledd › Papur › adolygiad gan gymheiriaid

  • Shee-Yee Khoo
    Ysgol Busnes Bangor
  • Huong Vu
    University of Aberdeen
  • Panagiotis Andrikopoulos
    Coventry Business School, Coventry University, UK
  • Patrycja Klusak
    University of East AngliaBennett Institute for Public Policy, University of Cambridge
For the first time we investigate the impact of credit rating changes on the financing decisions of overconfident CFOs. We find that CFO overconfidence significantly increases the sensitivity of net debt issuances to the rating changes, particularly when firms have no access to low-risk debt. Specifically, we establish that speculative-grade firms with overconfident CFOs reduce net debt issuance following rating changes (i.e., upgrades and downgrades). Our results hold after controlling for CEO bias. Furthermore, we document that CEO overconfidence has explanatory power on firm financing policies as it generates the potential multiplier effect on debt conservatism, as well as on investment return.
Iaith wreiddiolSaesneg
StatwsCyhoeddwyd - Medi 2022
DigwyddiadThe BAFA FMI SIG and Northern Area Group Annual Conference 2022 - University of York, York, Y Deyrnas Unedig
Hyd: 14 Medi 2022 → 15 Medi 2022

Cynhadledd

CynhadleddThe BAFA FMI SIG and Northern Area Group Annual Conference 2022
Gwlad/TiriogaethY Deyrnas Unedig
DinasYork
Cyfnod14/09/22 → 15/09/22
Gweld graff cysylltiadau