Abstract
We examine how shareholder dissent both affects and is affected by agency cost of debt, using credit ratings as a proxy. Specifically, we explore (1) whether agency costs of debt trigger dissent differently across corporate governance regimes characterized by greater stakeholder collaboration versus those with stronger shareholder dominance, and (2) whether credit rating agencies' subsequent responses to dissent vary across these regimes. We find evidence that dissent is lower when ratings are higher, but there is limited evidence that shareholders in more collaborative regimes dissent more. Dissent tends to improve subsequent credit ratings when shareholders are highly dominant, but this effect diminishes in more coordinated governance systems. This evidence suggests that dissent shifts power toward shareholders, which is more costly to debtholders in governance systems that are based on collaboration among stakeholders.
| Original language | English |
|---|---|
| Article number | 104850 |
| Journal | International Review of Financial Analysis |
| Volume | 111 |
| Early online date | 10 Jan 2026 |
| DOIs | |
| Publication status | Published - Mar 2026 |
Keywords
- Agency cost of debt
- Corporate governance
- Credit ratings
- Dissent voting
- Shareholder activism
- Varieties of capitalism
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
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