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Asset redeployability and CEO inside debt

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  • Gurmeet S. Bhabra
  • Ashrafee T. Hossain

Abstract

Using a large sample of US firms for the period 2006–2015, we investigate the relationship between asset redeployability (AR) and a Chief Executive Officer's (CEO) inside debt holdings (CID) (pension benefits and deferred compensation). We find a positive association between AR and CID. In addition, we also find that this relationship is stronger in firms that are more financially constrained and during times of economic uncertainty. Collectively, these findings suggest that asset market frictions captured by AR are better determinants of liquidation value than asset tangibility. Our results are robust to an array of sensitivity/robustness tests and endogeneity concerns.

Suggested Citation

  • Gurmeet S. Bhabra & Ashrafee T. Hossain, 2023. "Asset redeployability and CEO inside debt," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4299-4331, December.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:4:p:4299-4331
    DOI: 10.1111/acfi.13094
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