The Relationship between Capital Structure and the Cost of Debt:The Role of Corporate Social Responsibility

• Main Authors: YEH,LI-WEN, 葉麗雯
• Other Authors: LU,CHENG-SHOU
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/4a6zf2

碩士 === 國立高雄應用科技大學 === 財富與稅務管理系碩士在職專班 === 104 === This thesis contains listed firms in Taiwan from 2007 to 2014, and uses the survey data from “Corporate Citizen Award” made by Common Wealth Magazine as the sample of CSR performance. This thesis investigates the relationship between corporate social responsibility and the cost of debt capital based on risk mitigation and overinvestment perspectives. The empirical results support the risk mitigation hypothesis, suggesting that CSR could improve the information transparency and lesson the business risk to moderate the cost of debt capital. The firms with higher CSR could reduce the positive relationship between cost of debt and leverage. The CSR components are concerned, this result shows that only community score could reduce the cost of debt, indicating community involvement increases a firm’s reputation, leading to favorable cost of debt toward the firm. Moreover, the CSR has a positive effect on credit ratings, suggesting CSR could moderate the relationship between capital structure and credit ratings. Furthermore, the firms with higher CSR score, strong corporate governance mechanisms, keeping the interest of customers, employees, innovation investment, and involvement in special community issues will have higher creditworthiness through reputation creating and risk reduction.