The impact of CEO education on convertible bond issuance

Amedeo De Cesari, Marie Dutordoir, Zainab Mehmood

Research output: Contribution to journalArticleAcademicpeer-review


We examine the impact of managerial education on a firm's decision to issue convertible bonds instead of standard, non-hybrid securities. Upper echelons theory argues that better managerial education attainment fosters a higher ability to process complex information and tolerate ambiguity. Exploiting convertible bonds' higher degree of complexity, relative to seasoned equity and straight bonds, we hypothesise that Chief Executive Officers (CEOs) with higher education levels are more likely to issue convertible bonds instead of non-hybrid security types. A multinomial probit model analysing firms' choice between convertibles, seasoned equity, and straight bonds provides evidence consistent with this hypothesis. A one-level increase in a CEO's highest academic degree raises the likelihood of substituting convertibles for non-hybrid securities by 2.86%, after controlling for standard corporate security choice …
Original languageEnglish
Pages (from-to)1382
Number of pages1405
JournalEuropean Journal of Finance
Issue number12
Publication statusPublished - 2023
Externally publishedYes


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