Does Corporate Social Responsibility Facilitate Public Debt Financing?

58 Pages Posted: 30 Aug 2019 Last revised: 23 Jul 2024

See all articles by Xin Chang

Xin Chang

Nanyang Business School, Nanyang Technological University

Bin Xu

University of Leeds

Yung Chiang Yang

University of Liverpool - Management School (ULMS)

Date Written: January 15, 2020

Abstract

We find that better CSR performance increases firms’ share of public debt in total debt, especially for firms facing higher agency and information costs or more severe financial constraints. Moreover, the CSR effect on public debt is weaker for firms in sin industries or low-trust regions where CSR is less likely to be viewed as a genuine commitment by investors. Utilizing the BP oil spill event as a shock to investors’ CSR awareness, we document that the positive effect of CSR on public debt is more evident after the shock, particularly for firms outside the oil and gas industries.

Keywords: public debt, bank debt, debt structure, corporate social responsibility, financial constraints

Suggested Citation

Chang, Xin and Xu, Bin and Yang, Yung Chiang, Does Corporate Social Responsibility Facilitate Public Debt Financing? (January 15, 2020). Nanyang Business School Research Paper No. 24-09, Available at SSRN: https://ssrn.com/abstract=3442970 or http://dx.doi.org/10.2139/ssrn.3442970

Xin Chang

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore

HOME PAGE: https://personal.ntu.edu.sg/changxin/

Bin Xu (Contact Author)

University of Leeds ( email )

Leeds
United Kingdom

Yung Chiang Yang

University of Liverpool - Management School (ULMS) ( email )

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