Date of Award
Spring 4-27-2026
Document Type
Dissertation
Publication Status
Version of Record
Submission Date
May 2026
Department
Finance
College Granting Degree
College of Business
Department Granting Degree
Finance
Degree Name
Doctor of Philosophy (PhD)
Thesis/Dissertation Advisor [Chair]
David Javakhadze
Abstract
In this two-essay examination of CEO social capital and firm outcomes, the first paper draws on competing governance perspectives regarding the role of board friendliness in shaping firms’ cost of debt. I evaluate these perspectives by exploiting exogenous CEO turnover-driven shocks to board connections and multiple identification strategies to address endogeneity and selection concerns. Results show that CEO–board connections are negatively associated with firms’ bond spreads. Establishing channel, I show that this relationship operates through reduced corporate risk-taking, measured by the volatility of returns and leverage. Moreover, the negative effect of CEO–board connections on debt costs is amplified in complex information environments (specifically, when analyst coverage is high, forecast error is high, or both conditions jointly hold).
Together, the findings suggest that interpersonal governance dynamics systematically shift risk across capital providers, with measurable consequences for debt pricing. The study contributes to the literature by clarifying the conditions under which friendly boards lower financing costs, and it adds to practice by identifying a novel governance channel that creditors can incorporate into credit risk assessments.
The second paper examines the relationship between CEO social capital and firm-level climate change–related innovation. Focusing on the structural properties of CEO networks, I use eigenvector centrality to capture a CEO’s embeddedness within influential professional networks. Using a panel of U.S. firms and multiple measures of climate innovation (patent counts, citations, and economic value), I find that higher CEO eigenvector centrality is consistently associated with lower levels of climate innovation, conditional on firm and year fixed effects and a comprehensive set of controls.
Cross-sectional analyses show that this negative association is generally stronger in settings with greater managerial discretion, including higher entrenchment and weaker external monitoring. To address endogeneity, I exploit exogenous shocks to CEO centrality following turnover events due to retirement or death. While stacked difference-in-differences estimates are not statistically significant, instrumental variables (2SLS) estimates using a turnover-based instrument yield negative and significant effects for patenting and citations. Finally, interaction analyses indicate that climate innovation associated with higher CEO centrality is linked to weaker short-term performance, with mixed long-term effects.
Recommended Citation
Hudson-Vassell, Michael, "CEO SOCIAL CAPITAL, CLIMATE INNOVATION, AND COST OF DEBT" (2026). Electronic Theses and Dissertations. 259.
https://digitalcommons.fau.edu/etd_general/259