Article
Corporate social responsibility and the likelihood of external financing
Journal of Economic Analysis
(2024)
Abstract
This paper empirically investigates the relation between firm performance in corporate social responsibility (CSR) and the need and likelihood of external financing to test the predictions of agency and stakeholder theories. Empirical results from Logit, Linear Probability Model, OLS and Firm fixed effects regressions indicate that CSR is negatively related to the likelihood and level of external financing. Further analysis indicates that CSR has a negative and significant effect on both net equity issued (NEI) and net debt issued (NDI), the two components of external financing. Overall, the empirical results support the predictions of agency theory.
Keywords
- Corporate social responsibility; net debt issued; net equity issued; external financing
Disciplines
Publication Date
June 15, 2024
DOI
https://doi.org/10.58567/jea03020005
Citation Information
Shahbaz A Sheikh. "Corporate social responsibility and the likelihood of external financing" Journal of Economic Analysis Vol. 3 Iss. 2 (2024) p. 65 - 80 ISSN: 2811-0943 Available at: http://works.bepress.com/shahbaz_sheikh/33/