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Corporate Social Responsibility and Credit Ratings: On the Moderating Role of Firm Capability

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  • Chu-Hsiung Lin
  • Tzu-Chuan Kao
  • Chang-Cheng Changchien
  • Chien-Hui Wu

Abstract

This study reexamines the effects of corporate social responsibility (CSR) on credit ratings. On examining a sample of listed firms in Taiwan from 2013 to 2015, we find that our results do not support that CSR activities can enjoy more favorable credit ratings. However, firm capabilities can improve credit ratings, and the relationship between CSR and credit ratings is significant for firms with high capability. Our results indicate that CSR activities are beneficial to credit ratings only for firms with high capabilities.

Suggested Citation

  • Chu-Hsiung Lin & Tzu-Chuan Kao & Chang-Cheng Changchien & Chien-Hui Wu, 2021. "Corporate Social Responsibility and Credit Ratings: On the Moderating Role of Firm Capability," Bulletin of Applied Economics, Risk Market Journals, vol. 8(2), pages 17-24.
    • Handle: RePEc:rmk:rmkbae:v:8:y:2021:i:2:p:17-24
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    References listed on IDEAS

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    1. Pornsit Jiraporn & Napatsorn Jiraporn & Adisak Boeprasert & Kiyoung Chang, 2014. "Does Corporate Social Responsibility (CSR) Improve Credit Ratings? Evidence from Geographic Identification," Financial Management, Financial Management Association International, vol. 43(3), pages 505-531, September.
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    5. Sun, Wenbin & Cui, Kexiu, 2014. "Linking corporate social responsibility to firm default risk," European Management Journal, Elsevier, vol. 32(2), pages 275-287.
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    More about this item

    Keywords

    Corporate Social Responsibility; Credit Ratings; Firm Capability; Corporate Financial Performance.;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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