Strategic Management Journal· 2013Q1
Corporate social responsibility and access to finance
- 3,746citations
- Q1SCImago
- 2013year
Short summary
Firms with superior corporate social responsibility (CSR) performance experience significantly lower capital constraints, indicating better access to finance.
AI-generated from the title and abstract; the full text is not read.
Key points
- Higher CSR performance is linked to significantly lower capital constraints.
- Better stakeholder engagement reduces agency costs, improving finance access.
- Increased transparency around CSR performance reduces informational asymmetry.
- Both social and environmental dimensions of CSR drive this effect.
AI-generated from the title and abstract; the full text is not read.
Abstract
We investigate whether superior performance on corporate social responsibility ( CSR ) strategies leads to better access to finance. We hypothesize that better access to finance can be attributed to (1) reduced agency costs due to enhanced stakeholder engagement and (2) reduced informational asymmetry due to increased transparency. Using a large cross‐section of firms, we find that firms with better CSR performance face significantly lower capital constraints. We provide evidence that both better stakeholder engagement and transparency around CSR performance are important in reducing capital constraints. The results are further confirmed using several alternative measures of capital constraints, a paired analysis based on a ratings shock to CSR performance, an instrumental variables approach, and a simultaneous equations approach. Finally, we show that the relation is driven by both the social and environmental dimension of CSR . Copyright © 2013 John Wiley & Sons, Ltd.
The authors' abstract, as published at the source. Strategic Management Journal, 2013 · DOI ↗
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Field: Strategy and Management
Strategy and ManagementBusiness, Management and Accounting