RT Article
T1 CEO inside debt and employee workplace safety
JF Journal of business ethics
VO 182
IS 1
SP 159
OP 175
A1 Wu, Xuan
A1 Li, Yueting
A1 Yu, Yangxin
A2 Li, Yueting
A2 Yu, Yangxin
LA English
YR 2023
UL https://ixtheo.de/Record/183117037X
AB Theoretical studies suggest that, when determining the workplace safety level, CEOs face a trade-off between ex ante safety-improving expenditures and the expected losses due to ex post injury and illness occurrences. We examine whether firms with higher CEO inside debt holdings have safer workplaces. Using establishment-level employee workplace injury and illness data, we find that CEOs’ inside debt holdings are negatively associated with employee workplace injury and illness cases. This relationship is more pronounced if workers’ compensation premiums are more sensitive to injury claims and for firms with more government business and less pronounced for firms with higher levels of secured debt. We provide some evidence that our main result stems from CEOs increasing safety investments. Our empirical results are shown to be robust under a batch of robustness tests and when considering potential endogeneity problems. Our findings suggest that CEOs with higher levels of inside debt holdings are more sensitive to wealth loss due to employee injury and illness, leading to a safer workplace.
K1 CEO inside debt
K1 Firm operational risk
K1 G30
K1 J28
K1 K32
K1 M41
K1 workplace safety
K1 Aufsatz in Zeitschrift
DO 10.1007/s10551-021-05033-6