Fueling debt: generalist CEOs and the corporate over-indebtedness dilemma

Using data from Chinese listed companies between 2011 and 2024, we develop a dual‑channel financing demand‑supply analytical framework to examine the impact of generalist CEOs on corporate over‑indebtedness. The findings reveal that generalist CEOs, driven by their heightened risk preference, create substantial financing demand through expansionary investment strategies. On the supply side, financial institutions price generalist CEOs as risk factors, elevating debt costs, while their social networks secure expanded trade credit, creating parallel financing channels. This dual demand‑supply dynamic ultimately leads to over‑indebtedness. The research provides novel theoretical perspectives for understanding the formation mechanisms of corporate over‑indebtedness and offers important implications for improving corporate governance mechanisms.