The effects of Board of Directors' education on firms' credit ratings

Research output: Contribution to journalArticlepeer-review

Abstract

Using a data set of 1,618 firms from 39 countries, we examine the influence of the educational attainment of a firm’s board of directors on its credit rating. We construct a Leadership Education Index that reflects the educational level of the key members of the board. We document, after controlling for firm and country-specific characteristics, that firms in which the key members of the board have a higher educational level are more likely to receive better credit ratings. To ensure robustness in our results, we conduct a number of analyses and tests designed to alleviate endogeneity and correct for sample bias. Our findings highlight the importance of hiring and retaining well-educated board members that are capable to manage firms and obtain better credit ratings.
Original languageEnglish
Pages (from-to)294-313
JournalJournal of Business Research
Volume116
Early online date28 May 2020
DOIs
Publication statusPublished - Aug 2020

Keywords

  • Corporate governance
  • Leadership Index
  • Education
  • Credit Ratings
  • embargoover12

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