CEO inside debt holdings and credit ratings

Mostafa Monzur Hasan*, Ashrafee Hossain, Takdir Hossain

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


In this paper we investigate the relationship between chief executive officer (CEO) inside debt holdings (pension benefits and deferred compensation) and long-term credit ratings. We provide evidence that firms with a higher level of inside debt holdings enjoy better credit ratings. Our results are robust to the use of alternative regression estimation and alternative measures of key variables. We employ instrumental variable–based two-stage least squares regression and instrumental variable regression estimation using heteroskedasticity-based instruments to mitigate the endogeneity concern. In addition, we employ propensity-matched sample and entropy balancing estimates to alleviate endogeneity concerns. Our cross-sectional analyses reveal that the relationship between CEO inside debt holdings and credit ratings is more pronounced in firms with a poor information environment, a weak monitoring mechanism, and powerful CEOs. Overall, findings from our study suggest that credit rating agencies evaluate CEO insider debt holdings positively in assessing the creditworthiness of a firm.
Original languageEnglish
Article number100337
Pages (from-to)1-20
Number of pages20
JournalJournal of Contemporary Accounting and Economics
Issue number1
Early online date6 Aug 2022
Publication statusPublished - Apr 2023


  • CEO inside debt
  • Credit ratings
  • Executive compensation


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