CEO inside debt and corporate political disclosure

Nasr M., Zalata A. M., Vithana K., Guan J., Elmahgoub M.

Journal of Accounting and Public Policy, vol.54, 2025 (SSCI, Scopus) identifier

  • Publication Type: Article / Article
  • Volume: 54
  • Publication Date: 2025
  • Doi Number: 10.1016/j.jaccpubpol.2025.107378
  • Journal Name: Journal of Accounting and Public Policy
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, ABI/INFORM, Public Affairs Index
  • Keywords: CEO inside debt holdings, Corporate political disclosure, Deferred compensation, Risk-taking
  • Open Archive Collection: Article
  • Azerbaijan State University of Economics (UNEC) Affiliated: Yes

Abstract

This paper investigates the impact of CEO inside debt holdings on corporate political disclosure (CPD) using a sample of S&P 500 firms. Our results indicate that inside debt holdings motivate CEOs to enhance CPD. These findings are robust across various proxies and endogeneity tests. Our mediation analysis shows that CEOs with high levels of inside debt use CPD to reduce the firm's probability of default, improve the firm's information environment, protect corporate reputation, and secure more favorable debt contracting terms. Cross-sectional analysis reveals that the effect of CEO inside debt on CPD is stronger in financially constrained firms and in firms headquartered in more corrupt states, and it is more pronounced among Democratic CEOs compared to Republican CEOs. Overall, these findings highlight the significance of CEO incentive structures in shaping corporate disclosures.