Theses and Dissertations

Date of Award

5-1-2026

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Finance

First Advisor

Ahmed Elnahas

Second Advisor

Siamak Javadi

Third Advisor

Nah H. Nguyen

Abstract

This dissertation comprises of two papers. In the first paper, I found that despite being thought of as a governance mechanism, CEO inside debt seems to distort firms’ information environment. My results indicate that the CEO inside debt creates an incentive for managers to hoard bad news to prevent technical defaults, leading to increasing stock price crash risk. My results are robust after addressing endogeneity using the instrumental variable (IV) approach, a difference-in-differences test based on the implementation of Internal Revenue Code Section 409A Final Regulations, and Oster’s omitted variable diagnostic test, and selection bias using the propensity score matching (PSM) and Entropy balancing (EB) approaches. The results are stronger for firms that are poorly governed, operate in less competitive industries, have lower institutional ownership, and have higher information asymmetry. Further, the results are robust to controlling for CSR, local religiosity, tax avoidance, financial opacity, CEO power, and CEO as well as local political ideology.

In the second paper, I provide robust empirical evidence of the ex-ante adverse effect of cybersecurity risk on firms’ credit risk. I find that monthly yield spread changes are significantly larger for firms with high cyber risk than firms with no cyber risk. This result survives a battery of tests to ensure robustness and ease endogeneity concerns. This effect is driven by poorly rated firms and those that pay no attention to risk management and is clustered around the release of annual reports when bondholders are updated on firms’ cybersecurity risk. I document a spillover effect to no-cyber risk firms from their high cyber risk customers and industry peers, highlighting the systematic nature of this risk and further demonstrate a significant rise in the demand for insurance against the debt of high cyber risk firms. Overall, I show that bondholders view cybersecurity as a significant risk factor.

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Copyright 2026 Amir Gholami. All Rights Reserved. https://proquest.com/docview/3371165011

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