Corporate Social Responsibility and Access to Finance

This article investigates whether superior performance on corporate social responsibility (CSR) strategies leads to better access to finance.

This research hypothesis suggests that this is due to (1) reduced agency costs from increased stakeholder engagement, and (2) reduced information gaps through greater transparency. Analyzing a broad sample of firms, we discover that those with robust CSR records encounter fewer capital restrictions. Our findings underscore the importance of stakeholder engagement and transparent CSR reporting in mitigating capital constraints. We validate these results across various metrics, using a shock analysis, instrumental variables, and simultaneous equations. Additionally, we demonstrate that CSR’s impact extends to both social and environmental dimensions.

For more details, please read Corporate Social Responsibility and Access to Finance. And please read pages 9 to 11 and pages 27 to 31 to understand the relationship between corporate social responsibility and capital constraints.