Institutional Shareholder Attention, Agency Conflicts, and the Cost of Debt

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dc.contributor.authorEl Ghoul, Sadoken
dc.contributor.authorGuedhami, Omraneen
dc.contributor.authorMansi, Sattar A.en
dc.contributor.authorYoon, Hyo Jinen
dc.date.accessioned2023-01-05T18:46:55Zen
dc.date.available2023-01-05T18:46:55Zen
dc.date.issued2020-01-15en
dc.date.updated2023-01-03T19:06:54Zen
dc.description.abstractUsing Kempf, Manconi, and Spalt’s (2017) measure of shareholder inattention, constructed from exogenous industry shocks to institutional investor portfolios, we find that firms with distracted shareholders are associated with a higher cost of debt. This effect is stronger for firms with more powerful CEOs, higher information asymmetry, and those operating in less competitive product markets. Further testing suggests that the inattention–cost of debt relation is driven primarily by dual holders directly observing shareholder distraction. Our results are robust to controlling for inattention at the retail investor level and to other external monitors, including credit rating agencies, financial analysts, and Big 4 auditors. Overall, our evidence suggests that institutional shareholder inattention has an incrementally negative effect on bond pricing.en
dc.description.versionAccepted versionen
dc.format.mimetypeapplication/pdfen
dc.identifier.issn0025-1909en
dc.identifier.orcidMansi, Sattar [0000-0001-7098-7996]en
dc.identifier.urihttp://hdl.handle.net/10919/113049en
dc.language.isoenen
dc.publisherInstitute for Operations Research and Management Sciencesen
dc.relation.urihttps://pubsonline.informs.org/doi/full/10.1287/mnsc.2022.4593en
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectAgency Conflictsen
dc.subjectBondholder–Shareholder Conflicten
dc.subjectCost of Debten
dc.subjectInattentionen
dc.titleInstitutional Shareholder Attention, Agency Conflicts, and the Cost of Debten
dc.title.serialManagement Scienceen
dc.typeArticle - Refereeden
dc.type.dcmitypeTexten
dc.type.otherArticleen
dcterms.dateAccepted2022-04-12en
pubs.organisational-group/Virginia Techen
pubs.organisational-group/Virginia Tech/Pamplin College of Businessen
pubs.organisational-group/Virginia Tech/Pamplin College of Business/Finance, Insurance, and Business Lawen
pubs.organisational-group/Virginia Tech/All T&R Facultyen
pubs.organisational-group/Virginia Tech/Pamplin College of Business/PCOB T&R Facultyen

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