Social Capital and Debt Contracting: Evidence from Bank Loans and Public Bonds

Hasan, Iftekhar; Hoi, Chun Keung; Wu, Qiang; Zhang, Hao

doi:10.1017/s0022109017000205

Cited by 421 publications

(133 citation statements)

References 79 publications

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“…This procedure is consistent with prior studies such as Hasan et al. []. The final sample contains 63,807 firm‐year observations for which data are available for all independent variables in the baseline regressions and at least one tax avoidance variable.…”

Section: Research Design Sample Selection and Summary Statisticsmentioning

confidence: 87%

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Does Social Capital Matter in Corporate Decisions? Evidence from Corporate Tax Avoidance

Hasan

Hoi

et al. 2017

Journal of Accounting Research

Self Cite

320

105

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We investigate whether the levels of social capital in U.S. counties, as captured by strength of civic norms and density of social networks in the counties, are systematically related to tax avoidance activities of corporations with headquarters located in the counties. We find strong negative associations between social capital and corporate tax avoidance, as captured by effective tax rates and book‐tax differences. These results are incremental to the effects of local religiosity and firm culture toward socially irresponsible activities. They are robust to using organ donation as an alternative social capital proxy and fixed effect regressions. They extend to aggressive tax avoidance practices. Additionally, we provide corroborating evidence using firms with headquarters relocation that changes the exposure to social capital. We conclude that social capital surrounding corporate headquarters provides environmental influences constraining corporate tax avoidance.

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Section: Research Design Sample Selection and Summary Statisticsmentioning

confidence: 87%

“…The extant social capital research has focused on a variety of economic phenomena (e.g., Knack and Keefer [], Guiso, Sapienza, and Zingales []); it rarely extends the analysis to the corporate setting and those that do (Jha and Chen [], Hasan et al. [], Hoi, Wu, and Zhang []) have likewise ignored the linkage between social capital and corporate tax avoidance.…”

mentioning

confidence: 99%

Does Social Capital Matter in Corporate Decisions? Evidence from Corporate Tax Avoidance

Hasan

Hoi

et al. 2017

Journal of Accounting Research

Self Cite

320

105

View full text Add to dashboard Cite

show abstract

“…This study also adds to the rich literature on social capital in economics and production processes (e.g., Fukuyama 1995;Guiso et al 2004;Rupasingha et al 2006), and recent work examining the influence of social capital in corporate settings (Jha and Chen 2015;Jha and Cox 2015;Hasan et al 2015).…”

Section: Introductionmentioning

confidence: 83%

“…Guiso et al (2004), Buonanno et al (2009), andHasan et al (2015) use blood and organ donation as an alternate proxy for social capital. Guiso et al (2004) argue that blood donations are a reflection of altruistic norms and can be considered exogenous to economic and legal incentives.…”

Section: Alternative Ways To Measure Social Capitalmentioning

confidence: 99%

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Social Capital and the Municipal Bond Market

Tang

Jaggi

2016

J Bus Ethics

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We examine the influence of social capital in the municipal bond market. Defined as the norms and networks that encourage cooperation, social capital is a social construct which captures a region's level of altruism, trustworthiness, and propensity to honor obligations. We expect that municipalities with high social capital are more trustworthy and likely to honor their debt obligations, which will result in lower bond yields. Our findings confirm that the bonds issued by municipalities located in high social capital counties exhibit lower yields compared to the municipalities located in low social capital counties. Our findings are also supported by bond prices in the secondary market, which shows that bonds from the municipalities located in high social capital regions have higher prices. Additional tests reveal that the influence of social capital is stronger for general obligation bonds, suggesting that social capital matters more for bonds where the willingness of municipalities to pay taxes is an important factor. Lastly, we document that the bonds of municipalities in high social capital areas are less likely to have insurance, suggesting that social capital may act as a substitute for bond insurance.

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Examining the influence of corporate social responsibility performance on earnings management: A global perspective in the context of sustainable development

Le,

Doan

2024

Bus Strat Dev

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This article examines the relationship between corporate social responsibility and earnings management behavior around the world. Using international data from 35 countries between 2003 and 2019, we find evidence that increased corporate social responsibility tends to mitigate the pressure to manage earnings. These findings are robust to alternate measures of earnings management, corporate social responsibility, as well as controlling for endogeneity caveats by two‐stage‐least square and system generalized‐method‐of‐moments estimations. We further show that the negative association between corporate social responsibility and earnings management is more pronounced for firms in countries with high press freedom or high societal trust. The findings from this article provide implications for investors, analysts, business participants, and regulators.

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Social Capital and Debt Contracting: Evidence from Bank Loans and Public Bonds

Cited by 421 publications

References 79 publications

Does Social Capital Matter in Corporate Decisions? Evidence from Corporate Tax Avoidance

Does Social Capital Matter in Corporate Decisions? Evidence from Corporate Tax Avoidance

Social Capital and the Municipal Bond Market

Examining the influence of corporate social responsibility performance on earnings management: A global perspective in the context of sustainable development

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