"Measuring the Impact of Corporate Social Responsibility on Cost of Capital and Investment Decisions "An Applied Study
Nouran Magdy Ahmed Hamdy Riad;
Abstract
Measuring the Impact of Corporate Social Responsibility on Cost of Capital and Investment decisions “An Applied Study” - Master Thesis (2018)
This study aims to investigate whether corporate social responsibility (CSR) could increase firm value by lowering the cost of capital. In addition, the study aims to examine the mediating effect that cost of capital has on both CSR and investment decisions within corporations. Data is collected from the financial statements of the firms listed in the Egyptian Stock Exchange that appear in the Egyptian index of social responsibility (S&P/ESG) index between 2012 and 2016.
The results show an insignificant negative relationship between CSR and the Cost of Equity Capital obtained through accounting-based valuation models; thus implying that firms applying CSR have no impact on its cost of equity. However, the results show a significant negative relationship between CSR and cost of debt. This means that firms that adopt CSR practices suffer low COD. Furthermore, results show a significant negative relationship between CSR and WACC, which implies that CSR practices, lowers firms’ overall cost of capital.
This study aims to investigate whether corporate social responsibility (CSR) could increase firm value by lowering the cost of capital. In addition, the study aims to examine the mediating effect that cost of capital has on both CSR and investment decisions within corporations. Data is collected from the financial statements of the firms listed in the Egyptian Stock Exchange that appear in the Egyptian index of social responsibility (S&P/ESG) index between 2012 and 2016.
The results show an insignificant negative relationship between CSR and the Cost of Equity Capital obtained through accounting-based valuation models; thus implying that firms applying CSR have no impact on its cost of equity. However, the results show a significant negative relationship between CSR and cost of debt. This means that firms that adopt CSR practices suffer low COD. Furthermore, results show a significant negative relationship between CSR and WACC, which implies that CSR practices, lowers firms’ overall cost of capital.
Other data
| Title | "Measuring the Impact of Corporate Social Responsibility on Cost of Capital and Investment Decisions "An Applied Study | Other Titles | قياس أثر المسئولية الاجتماعية للشركات المساهمة على تكلفة رأس المال وقرارات الاستثمار " دراسة تطبيقية" | Authors | Nouran Magdy Ahmed Hamdy Riad | Issue Date | 2018 |
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