Affiliation:
1. Department of Accounting Finance and Economics at Griffith University Brisbane Queensland Australia
2. Faculty of Business Administration Memorial University of Newfoundland St. John's Newfoundland and Labrador Canada
Abstract
AbstractUsing 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.
Funder
Social Sciences and Humanities Research Council of Canada
Subject
Economics, Econometrics and Finance (miscellaneous),Finance,Accounting