Prior studies argue that stable shareholders do not encourage firm managers to manage their earnings to achieve short-term earnings goals. They also state that firm managers with stable shareholders have an incentive to report smooth earnings to maintain long-term relationships with such...

We examine the effect of managerial ownership on the cost of debt as measured by the interest rate spread on corporate bonds for Japanese firms. First, we find that the managerial ownership is positively associated with interest rate spread after controlling for the other Japanese ownership...