The effects of board of directors’ education on firms’ credit ratings

Panagiota Papadimitri; Fotios Pasiouras; Menelaos Tasiou; Alexia Ventouri

doi:10.1016/j.jbusres.2020.04.059

The effects of board of directors’ education on firms’ credit ratings

Panagiota Papadimitri, Fotios Pasiouras, Menelaos Tasiou^*, Alexia Ventouri

^*Corresponding author for this work

Banking & Finance

Research output: Contribution to journal › Article › peer-review

36 Citations (Scopus)

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 language	English
Pages (from-to)	294-313
Number of pages	20
Journal	Journal of Business Research
Volume	116
DOIs	https://doi.org/10.1016/j.jbusres.2020.04.059
Publication status	Published - Aug 2020

Keywords

Corporate governance
Credit Ratings
Education
Leadership Index

Access to Document

10.1016/j.jbusres.2020.04.059

Cite this

@article{530379a7b17a4b2b88e00e740c1c1cfb,

title = "The effects of board of directors{\textquoteright} education on firms{\textquoteright} credit ratings",

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.",

keywords = "Corporate governance, Credit Ratings, Education, Leadership Index",

author = "Panagiota Papadimitri and Fotios Pasiouras and Menelaos Tasiou and Alexia Ventouri",

year = "2020",

month = aug,

doi = "10.1016/j.jbusres.2020.04.059",

language = "English",

volume = "116",

pages = "294--313",

journal = "Journal of Business Research",

issn = "0148-2963",

publisher = "Elsevier Inc.",

}

TY - JOUR

T1 - The effects of board of directors’ education on firms’ credit ratings

AU - Papadimitri, Panagiota

AU - Pasiouras, Fotios

AU - Tasiou, Menelaos

AU - Ventouri, Alexia

PY - 2020/8

Y1 - 2020/8

N2 - 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.

AB - 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.

KW - Corporate governance

KW - Credit Ratings

KW - Education

KW - Leadership Index

UR - http://www.scopus.com/inward/record.url?scp=85085373869&partnerID=8YFLogxK

U2 - 10.1016/j.jbusres.2020.04.059

DO - 10.1016/j.jbusres.2020.04.059

M3 - Article

AN - SCOPUS:85085373869

SN - 0148-2963

VL - 116

SP - 294

EP - 313

JO - Journal of Business Research

JF - Journal of Business Research

ER -

The effects of board of directors’ education on firms’ credit ratings

Abstract

Keywords

Access to Document

Other files and links

Fingerprint

Cite this