Corporate Social Responsibility and Cost of Capital: An Empirical Study of the Taiwan Stock Market

Wu, Shih-Wei; Lin, Fengyi; Wu, Chiaming

doi:10.2753/ree1540-496x5001s107

Cited by 40 publications

(29 citation statements)

References 35 publications

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“…In turn, the increase in the number of long‐term investors could lead to a reduction in the cost of equity capital. In this regard, several studies have verified the negative relationship between the implementation of sustainable practices and the cost of equity capital (El Ghoul, Guedhami, Kwok, & Mishra, ; Wu, Lin, & Wu, ; Xu, Liu, & Huang, ). In this perspective, our study extends these results to integrated thinking and the consequent publication of a high‐quality integrated report.…”

Section: Discussionmentioning

confidence: 96%

The impact on the cost of equity capital in the effects of integrated reporting quality

et al. 2019

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Integrated reporting is a new reporting tool that includes financial and nonfinancial information, which represents a natural evolution of the corporate reporting movement. Although this practice has gained increasing attention in recent years, both from an academic and professional perspective, the quality of the reports still represents a critical aspect due to inadequate investigation. Only a few studies have focused on integrated reporting quality, and contributions on the effects of quality have been even rarer. This study aims to investigate on the impact of integrated reporting quality on the firm's cost of equity capital, owing to the paramount importance of this parameter for firms and investors. Our results highlight that integrated reporting quality has a significantly negative association with the cost of equity capital, suggesting that integrated reporting quality represents an innovative way to reduce the cost of equity. To our knowledge, this is the first study that examines the relationship between integrated reporting quality and a firm's cost of equity.

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Section: Discussionmentioning

confidence: 96%

The impact on the cost of equity capital in the effects of integrated reporting quality

et al. 2019

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“…For instance, family controlled firms are found to have higher voting premiums (Caprio & Croci, 2008), have increased liquidity when double voting rights are used (Ginglinger & Hamon, 2012), and have a higher price of vote in unifications (Hauser & Lauterbach, 2004) than nonfamily firms. In addition, a number of studies focus on the cost of equity capital in listed family firms in relation to various other topics, for example, to the Asian financial crisis (Boubakri, Guedhami, & Mishra, 2010), to corporate social responsibility practices in listed Taiwanese firms (Wu, Lin, & Wu, 2014), or to corporate governance attributes (D. H. Tran, 2014).…”

Section: Where Are We Now?mentioning

confidence: 99%

Financing Decisions in Family Businesses: A Review and Suggestions for Developing the Field

Michiels

Molly

2017

Family Business Review

118

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Motivated by the growing attention to the financing decisions of family firms, this review brings together the two highly relevant research fields of family business and finance. This study critically reviews 131 articles on financing decisions in family businesses, published between 1977 and 2016 in 64 finance and management journals. We develop a state of the art on family business financing literature and present a model to guide extant and future research by identifying gaps across the theoretical perspectives and across context-specific elements such as family business heterogeneity and country-specific factors.

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“…According to the principal-agent theory, improving the level of information disclosure can alleviate information asymmetry Taghizadeh-Hesary, 2014, 2015), thus reducing agency costs. To increase the firm value, firms with adequate governance levels may improve voluntary information disclosure (Bi et al, 2012;Lu and Abeysekera, 2014;Wu et al, 2014). The firm scale is considered to be a powerful indicator that affects the disclosure of corporate social environment.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…First, our empirical evidence enriches the emerging literature on corporate social responsibility. Most prior studies have discussed the impact of corporate social responsibility on corporate value, cost of equity capital, and cash holdings value (Gregory et al, 2014;Wu et al, 2014;Arouri and Pijourlet, 2017). With the deterioration of environmental problems and the awakening of public environmental protection, ECSR has gradually attracted the attention of the government and researchers.…”

Section: Introductionmentioning

confidence: 99%

Can Environmental Corporate Social Responsibility Reduce Firms’ Idiosyncratic Risk? Evidence From China

Kong

Pan

Sun

et al. 2020

Front. Environ. Sci.

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Environmental corporate social responsibility (ECSR) can be a strategy to increase the transparency of investment information effectively to alleviate information asymmetry. The purpose of this article is to examine the impact of ECSR on firms’ idiosyncratic risk. Using the data of A-share listed firms in China and data of Rankins CSR Ratings by developing econometrics models, this study documents that ECSR can significantly reduce the firms’ idiosyncratic risk. This result perpetuates after a series of robustness checks. Besides, the results of conditional analyses reveal that the effect of ECSR is more pronounced for state-owned firms and firms with weaker external monitoring mechanisms and low internal control. Moreover, further evidence suggests that firms with high ECSR show a greater tendency to disclose more information, which reduces the information asymmetry and offers linkages from ESCR to firms’ idiosyncratic risk.

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Corporate Social Responsibility and Cost of Capital: An Empirical Study of the Taiwan Stock Market

Cited by 40 publications

References 35 publications

The impact on the cost of equity capital in the effects of integrated reporting quality

The impact on the cost of equity capital in the effects of integrated reporting quality

Financing Decisions in Family Businesses: A Review and Suggestions for Developing the Field

Can Environmental Corporate Social Responsibility Reduce Firms’ Idiosyncratic Risk? Evidence From China

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