Work

Executives’ early-life experience and corporate debt contracting: Evidence from CEO military experience

Year: 2025

Type: article

Abstract: We show that the leadership style of veteran CEOs has important implications for their companies’ costs of bank loans. We find that banks charge, on average, 10.8 basis points lower for firms headed by veteran CEOs, compared to otherwise similar firms. Firms with veteran CEOs are also subject to lower collateral requirements and covenant restrictions. The effect of veteran CEOs on loan costs comes from an improvement in the firm’s information environment and a reduction in firm risk. Overall, our study highlights the increasing relevance of leadership background in lending decisions, suggesting that personal characteristics may influence access to capital in global credit markets.

Source: Journal of International Financial Markets Institutions and Money

DOI: 10.1016/j.intfin.2025.102200

Authors: Harvey Nguyen, Mia Hang Pham, Van Hoang Vu

Institutions: Massey University, University of Newcastle Australia, RMIT University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,930

OpenAlex ID: W4412671697

FWCI: 5.38

Cites: 118

Cited by: 2

Related to: 10