This paper examines how corporate environmental responsibility (CER) affects the cost of equity capital for manufacturing firms in 30 countries. Using several approaches to estimate firms’ ex ante equity financing costs, we find that the cost of equity capital is likely to cheaper around the world when firms have a higher level of CER. Our results suggest that improving environmental responsibility would reduce firms’ equity financing costs. This paper contributes to the literature in two ways. First, we study the outcomes of corporate environmental responsibility, arguably one of the most important dimensions of CSR. Second, we perform a study from a cross-country sample that allows us to conclude that the negative relationship between CER and financing costs is at work around the world.
Key Words: Corporate environmental responsibility; Cost of equity capital
학회 소식
공지사항