Bauer, Derwall, and Pankratz (2018)

Bauer, Rob, Jeroen Derwall, and Nora M. C. Pankratz. "Insider ownership, governance mechanisms, and corporate bond pricing around the world."  Working paper (Maastricht University), 2018.

From the authors' abstract:  "We investigate the effect of insider ownership on corporate bond yield spreads from 2003 to 2014... We find that greater insider ownership is associated with higher yield spreads. This positive relationship holds after controlling for measures of risk-taking, which suggests that bondholders price-protect against greater insider ownership for reasons beyond insiders’ heightened incentives to take risk…. Using a global index of shareholder rights, we [also] show that the positive association between insider ownership and the spread decreases for firms with relatively stronger shareholder rights... We conclude that bondholders anticipate that greater insider ownership facilitates consumption of private benefits, with implications for the valuation of corporate debt around the world."

Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3300200