Do Politically Connected Board Members Influence Firms' Debt Choices? Public Debt Versus Bank Debt
ABSTRACT Using a unique hand‐collected data set on the political connections of board members of S&P 1500 companies, we find that board members with stronger government ties are positively associated with firms' preference for public debt over bank debt. This relationship is more pronounced in firms connected to high‐ranking officials and appointed politicians. Additionally, using quarterly data from 2015 to 2018 and difference‐in‐differences (DID) analyses, we find that political ties are differently related to firms' debt choices based on different party affiliations, types of political connections, and geopolitical factors.
Authors
- Fernando Moreira (ORCID: https://orcid.org/0000-0001-6167-0735)
- Gan Wang (ORCID: https://orcid.org/0009-0003-2432-9847)
- Mustapha Douch (ORCID: https://orcid.org/0000-0002-3906-1690)
Institutions
- University of Edinburgh (GB)
Publication Details
- Journal
- European Financial Management
- Published
- 2025-09-23
- DOI
- https://doi.org/10.1111/eufm.70022
- Primary Topic
- Political Influence and Corporate Strategies
- Type
- article
- Field-Weighted Citation Impact
- 0.00