The Effect of Corporate Social Responsibility on Cost of Corporate Bond: Evidence from China |
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Authors: | Jun Huang Wei Hu |
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Institution: | Business School, Hunan University, China, Changsha, China |
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Abstract: | This article examines the link between corporate social responsibility(CSR) and cost of bond(COB) in China. We find that there exists a negative relationship between CSR and COB. In particular, when the bond issuer is a state-owned enterprise, or when the credit rating of bond is high, the negative association between CSR and COB is strengthened. The findings indicate that CSR plays a significant role in reducing the risk premium of corporate bonds through an insurance-like effect. Moreover, the effect of CSR on COB also depends on contextual factors such as firm ownership and bond credit rating. |
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Keywords: | bond credit rating corporate bonds cost of debt financing CSR firm ownership |
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