The Relation between Corporate Governance and Credit Risk, Bond Yields and Firm Valuation
This study examines the empirical relations between the governance structure of public corporations in the United States and the rating and pricing of their debt securities. We study an unbalanced panel of 775 unique U.S. firms from 2001 through 2007 and identify several statistically significant relations between corporate governance factors and credit ratings, bond spreads and firm values. We find that credit ratings are negatively related to the presence of antitakeover measures for firms with speculative grade ratings and positively related to the presence of antitakeover measures for firms with investment grade ratings. Moreover, we find that spreads are positively related to the presence of antitakeover measures, and this relation is significantly stronger for firms with less than investment grade credit ratings. Our findings also suggest that more stable boards, defined as having attributes relating to board tenure, director liability indemnification and classified board structures are related to higher credit ratings and lower bond spreads. We conjecture that boards with greater stability may be better positioned to take into consideration the longer term interests of the firm as a whole, thus benefiting the firms creditors.
corporate governance credit risk credit rating bond spreads
Michael Bradley Dong Chen George Dallas Elizabeth Snyderwine
Duke University Standard & Poors Independent Consultant and adjunct professor (Loyola University Chicago and the University of Notre
国际会议
大连
英文
1-71
2008-07-02（万方平台首次上网日期，不代表论文的发表时间）