The Relation between Corporate Governance and Credit Risk, Bond Yields and Firm Valuation

dc.contributor.authorBradley, Michael
dc.contributor.authorChen, Dong
dc.contributor.authorDallas, George S.
dc.contributor.authorSnyderwine, Elizabeth
dc.date.accessioned2017-06-08T20:42:36Z
dc.date.available2017-06-08T20:42:36Z
dc.date.issued2007
dc.description.abstractThis 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 firm's creditors.en_US
dc.description.urihttp://ssrn.com/abstract=1078463en_US
dc.format.extent71 pagesen_US
dc.genrejournal articlesen_US
dc.identifierdoi:10.13016/M2GC3X
dc.identifier.citationBradley, Michael and Chen, Dong and Dallas, George S. and Snyderwine, Elizabeth, The Relation between Corporate Governance and Credit Risk, Bond Yields and Firm Valuation (December 24, 2007).en_US
dc.identifier.uri10.2139/ssrn.1078463
dc.identifier.urihttp://hdl.handle.net/11603/4006
dc.language.isoen_USen_US
dc.relation.isAvailableAtUniversity of Baltimore
dc.subjectcorporate governanceen_US
dc.subjectcredit risken_US
dc.subjectcredit ratingen_US
dc.subjectbond spreadsen_US
dc.titleThe Relation between Corporate Governance and Credit Risk, Bond Yields and Firm Valuationen_US
dc.typeTexten_US

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