| Summary: | 碩士 === 國立成功大學 === 財務金融研究所碩士在職專班 === 106 === The cost of capital is one of the important factors affecting corporate investment decisions and business management performance. However, agency problems may increase the investment risk of fund providers. To mitigate the negative impact of agency problems, professional and objective credit risk rating agencies make reasonable credit ratings of enterprises, which may serve as a reference for users. Therefore, this study uses Taiwanese publicly traded companies from 2012 to 2016 to investigate the association between credit rating and the cost of debt. Empirical results show that the lower the enterprise credit rating, the higher the enterprise’s cost of debt.
In addition, corporate social responsibility has become a core part of enterprises’ long-term business development planning. Therefore, this study further examine the mitigation effect of corporate social responsibility (CSR) implementation on the association between credit rating and the cost of debt. The findings show that CSR implementation mitigates the negative relation between credit rating and cost of debt, suggesting that an enterprise actively engaging in corporate social responsibility can increase its reputation and market competitiveness, and therefore reduce the impact of credit rating on the cost of debt.
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