Corporate Social Responsibility and the Cost of Debt
In this paper, we analyze the relationship between corporate social responsibility (CSR) and the cost of debt financing. Using a large sample of U.S. firms across all industries from 2006 to 2013, we find that firms with strong CSR have a lower cost of debt. This is especially evident in the manufacturing and financial industries. Further, we analyze the impact of managerial ownership on the CSR/cost of debt relationship. Practically speaking, to reduce the cost of debt financing our results suggest that it would be beneficial for firms to strengthen involvement and engagement in CSR activities.
Cooper, Elizabeth W. and Uzun, Hatice, "Corporate Social Responsibility and the Cost of Debt" (2015). Department of Finance. 11.