TY  - UNPD
A1  - Harenberg, Daniel
A1  - Ludwig, Alexander
T1  - Social security and the interactions between aggregate and idiosyncratic risk : [Version 9 Juli 2014]
T2  - SAFE working paper series ; No. 59
N2  - We develop a model of managerial compensation structure and asset risk choice. The model provides predictions about how inside debt features affect the relation between credit spreads and compensation components. First, inside debt reduces credit spreads only if it is unsecured. Second, inside debt exerts important indirect effects on the role of equity incentives: When inside debt is large and unsecured, equity incentives increase credit spreads; When inside debt is small or secured, this effect is weakened or reversed. We test our model on a sample of U.S. public firms with traded CDS contracts, finding evidence supportive of our predictions. To alleviate endogeneity concerns, we also show that our results are robust to using an instrumental variable approach.
T3  - SAFE working paper - 59 
KW  - Compensation Structure
KW  - Credit Spread
KW  - Risk-Taking
KW  - Inside Debt
KW  - Business Cycle
Y1  - 2014
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/34452
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-344526
UR  - http://ssrn.com/abstract=2464430
IS  - Version 9 Juli 2014
PB  - SAFE
CY  - Frankfurt am Main
ER  -