Affiliation:
1. Glorious Sun School of Business and Management Donghua University Shanghai China
2. School of Economics and Business Administration Chongqing University Chongqing China
3. School of Management Huazhong University of Science and Technology Wuhan China
4. Business School The University of Queensland Brisbane Australia
Abstract
AbstractThis study investigates how Chief Executive Officer (CEO) reputation, proxied by receiving prestigious awards, impacts suppliers’ provision of trade credit to a firm. Employing a sample of Chinese public firms, we document that firms managed by award‐winning CEOs receive more trade credit than do propensity score matching matched control firms after the award year. Further analyses suggest that the increased trade credit of firms with reputable CEOs is due to the decreased default risk and information risk associated with those firms. Moreover, the impact of CEOs’ reputations on trade credit varies depending on award rarity, financing needs, CEO characteristics and firm opacity. Overall, our results are consistent with efficient contracting theory and signal theory.
Funder
National Office for Philosophy and Social Sciences
National Natural Science Foundation of China
Subject
Finance,Business, Management and Accounting (miscellaneous),Accounting
Cited by
4 articles.
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