David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 104 (2):197-206 (2011)
Drawing on risk mitigation theory, this article examines whether the improvement of firms’ social performance reduces debt financing costs (CDFs) in China, the world’s largest emerging market. Employing both the ordinary least square (OLS) and the two-stage instrumental variable regression methods, we find that improved corporate social responsibility (CSR) reduces the CDF when firms’ CSR investment is lower than an optimal level; however, this relationship is reversed after the CSR investment exceeds the optimal level. Firms with extremely low or extremely high CSR are subject to a higher CDF. The results also suggest that the optimal CSR level for small firms is higher than that for large firms. This study is the first to document a U-shaped relationship between CSR and CDF and also the first to investigate this relationship within an emerging market context.
|Keywords||China Corporate social responsibility Corporate philanthropy Debt financing cost Risk management Size|
|Categories||categorize this paper)|
|Through your library||Configure|
Similar books and articles
Wenjing Li & Ran Zhang (2010). Corporate Social Responsibility, Ownership Structure, and Political Interference: Evidence From China. [REVIEW] Journal of Business Ethics 96 (4):631 - 645.
Yan Leung Cheung, Weiqiang Tan, Hee-Joon Ahn & Zheng Zhang (2010). Does Corporate Social Responsibility Matter in Asian Emerging Markets? Journal of Business Ethics 92 (3):401 - 413.
Qi Li, Wei Luo, Yaping Wang & Liansheng Wu (2013). Firm Performance, Corporate Ownership, and Corporate Social Responsibility Disclosure in China. Business Ethics 22 (1):159-173.
Liangrong Zu & Lina Song (2009). Determinants of Managerial Values on Corporate Social Responsibility: Evidence From China. [REVIEW] Journal of Business Ethics 88 (1):105 - 117.
Junwei Shi, Haiyan Fu & Lijun Hu (2007). Social Responsibility, Social Capital, and Corporate Competitive Advantage in Transitional China. International Corporate Responsibility Series 3:377-394.
Linda C. Rodríguez & Ivan Montiel (2011). A Conceptualization of How Firms Invest in CSR Based on Country Risk. Proceedings of the International Association for Business and Society 22:309-315.
Belaid Rettab, Anis Ben Brik & Kamel Mellahi (2009). A Study of Management Perceptions of the Impact of Corporate Social Responsibility on Organisational Performance in Emerging Economies: The Case of Dubai. [REVIEW] Journal of Business Ethics 89 (3):371 - 390.
Chung-Hua Shen & Yuan Chang (2009). Ambition Versus Conscience, Does Corporate Social Responsibility Pay Off? The Application of Matching Methods. Journal of Business Ethics 88 (1):133 - 153.
Klaus-Michael Menz (2010). Corporate Social Responsibility: Is It Rewarded by the Corporate Bond Market? A Critical Note. [REVIEW] Journal of Business Ethics 96 (1):117-134.
Ran Zhang & Zabihollah Rezaee (2009). Do Credible Firms Perform Better in Emerging Markets? Evidence From China. Journal of Business Ethics 90 (2):221 - 237.
Roy W. Smolens & Nicolaas Tempelhof (2005). Cultural Perspectives of CSR Opportunities for German Firms in Poland. International Corporate Responsibility Series 2:259-283.
Angeloantonio Russo & Antonio Tencati (2009). Formal Vs. Informal CSR Strategies: Evidence From Italian Micro, Small, Medium-Sized, and Large Firms. [REVIEW] Journal of Business Ethics 85 (2):339 - 353.
Krishna Udayasankar (2008). Corporate Social Responsibility and Firm Size. Journal of Business Ethics 83 (2):167 - 175.
Amir Barnea & Amir Rubin (2010). Corporate Social Responsibility as a Conflict Between Shareholders. Journal of Business Ethics 97 (1):71 - 86.
Shangkun Xu & Rudai Yang (2010). Indigenous Characteristics of Chinese Corporate Social Responsibility Conceptual Paradigm. Journal of Business Ethics 93 (2):321 - 333.
Added to index2011-11-03
Total downloads3 ( #220,511 of 1,004,692 )
Recent downloads (6 months)1 ( #64,743 of 1,004,692 )
How can I increase my downloads?