Abstract
SYNOPSIS: This study examines whether and how corporate social responsibility (CSR) disclosure plays a role in firms' choices of public versus private debt financing. We find that borrowing firms with higher levels of CSR disclosure tend to rely more on public debt than private debt. Further analyses reveal that the relation between CSR disclosure and firms' reliance on public debt is stronger for borrowing firms with higher financial reporting quality, and with standalone or externally assured CSR reports. In addition, we find that borrowing firms with higher levels of CSR disclosure tend to issue bonds at more favorable terms (i.e., lower bond yield spread and longer maturity). Together, our findings are consistent with the notion that nonfinancial CSR disclosure plays an incrementally important role in a firm's debt placement decisions.
Original language | English |
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Pages (from-to) | 151-173 |
Number of pages | 23 |
Journal | Accounting Horizons |
Volume | 34 |
Issue number | 1 |
Early online date | 1 Oct 2019 |
DOIs | |
Publication status | Published - Mar 2020 |
Scopus Subject Areas
- Accounting
User-Defined Keywords
- CSR disclosure
- Debt contracting
- Nonfinancial disclosure
- Public bond