- January 2020
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- Research Question/IssueOur study examines whether international corporate governance systems shape the relationship between a firm's engagement in corporate social responsibility (CSR) and their cost of financing (both equity and debt). Research Findings/InsightsUsing a large international sample, our findings reveal that although the link between CSR performance and the cost of equity is negative in a shareholder‐oriented system, this relationship is positive in a stakeholder‐oriented system. Furthermore, the link between CSR performance and the cost of debt is negative for firms that are close to default in both systems.
- corporate governance; corporate social responsibility; cost of debt; cost of equity