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Social capital and cost of debt: Evidence from Chinese CEO network centrality

Author

Listed:
  • Chen, Yiping
  • Shan, Yuan George
  • Wang, Jimin
  • Yang, Xinxin
  • Zhang, Junru

Abstract

Using a unique dataset comprising 6313 firm-year observations for Chinese listed firms between 2008 and 2017, we investigate the impact of CEO social capital on cost of debt. Our results show that CEO social capital is negatively related to cost of debt, and the impact of CEO social capital in environments with a low degree of marketization or social trust is more pronounced than in environments with a high degree of marketization or social trust. Moreover, our results reveal that two potential mechanisms, discretionary accruals and information disclosure quality, mediate the impact of CEO social capital on cost of debt.

Suggested Citation

  • Chen, Yiping & Shan, Yuan George & Wang, Jimin & Yang, Xinxin & Zhang, Junru, 2024. "Social capital and cost of debt: Evidence from Chinese CEO network centrality," Emerging Markets Review, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:ememar:v:60:y:2024:i:c:s1566014124000268
    DOI: 10.1016/j.ememar.2024.101131
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    More about this item

    Keywords

    Social capital; Cost of debt; Network centrality; Mediation effect; Information asymmetry; China;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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