| Summary: | 碩士 === 國立成功大學 === 財務金融研究所 === 102 === The aim of this paper is to examine the effects of the four components of CSR on firm cost of equity capital under different stages of economic development. Previous papers have used weighted CSR scores as a variable to determine the effects of CSR strategies, but this research is intended to be more specific in order to identify the effects that each component, including environmental, economic, and social components as well as corporate governance as they relate to firms’ cost of equity capital. Furthermore, countries under consideration in this study are classified into highly developed, moderately developed, and least developed countries under the rules of the International Monetary Fund.
In highly developed and moderately developed countries, CSR performance was found to be significantly positively related to implied cost of equity capital. In addition, by isolating the impact of each component of CSR on implied cost of equity capital, the social, environmental, economic and corporate governance scopes were shown to be significantly positively related to implied cost of equity capital in highly developed countries. However, in moderately developed countries, all CSR scopes were significantly negatively related to implied cost of equity capital.
This research posits that under different stages of economic development, countries differ from each other in regard to culture, financial systems, capital markets, legal systems and historical development. Through executing an ideal level of CSR programs, firms can improve their reputations. As a result, public policies will be promoted encouraging companies to be more active in their relationships with their stakeholders provided that these relationships will result in gains in both image and reputation.
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