 An International Perspective on Corporate Social Responsibility, Investor Time Preferences, and Cost of EquityWolfgang Breuer, Till Trauzettel, Torbjörn Müller and Astrid Salzmann International Business Review, 2024, vol. 33, issue 1 Abstract: For a sample of 25,749 international firm-year observations, we evaluate the relationship between shareholders’ time orientation, firms’ corporate social responsibility (CSR), and the cost of equity capital. We find evidence that patient institutional investors monitor the CSR strategy of the firms in which they invest to the extent that the CSR practices of these firms lower their cost of equity capital. Further analysis indicates that this effect is less pronounced when strong national institutions are in place, making monitoring by patient institutional investors unnecessary. Our results reinforce the idea that CSR can be beneficial by lowering the cost of capital as long as adequate control mechanisms are in place. Keywords: Behavioral finance; Corporate social responsibility; Cost of equity; Cultural finance; Time orientation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:33:y:2024:i:1:s096959312300094x Ordering information: This journal article can be ordered from DOI: 10.1016/j.ibusrev.2023.102194 Access Statistics for this article International Business Review is currently edited by P. Ghauri More articles in International Business Review from Elsevier |
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