Mandatory CSR Disclosure, CSR Assurance, and the Cost of Debt Capital: Evidence from Taiwan

Lopin Kuo, Po-Wen Kuo and Chun-Chih Chen
Additional contact information
Lopin Kuo: Department of Accounting, Tamkang University, New Taipei City 251301, Taiwan
Po-Wen Kuo: Department of Accounting, Tamkang University, New Taipei City 251301, Taiwan
Chun-Chih Chen: Securities and Futures Bureau, Financial Supervisory Commission, Taipei City 106237, Taiwan

Sustainability, 2021, vol. 13, issue 4, 1-19

Abstract: This study examined the impact of mandatory corporate social responsibility (CSR) disclosure, CSR assurance and the reputation of assurance providers (accounting firms) on the cost of debt capital. Our difference-in-difference research design in conjunction with univariate and multiple regression analysis was assessed using a large sample of firms listed on the Taiwan Stock Exchange and the Taipei Exchange. Our empirical results revealed that mandatory CSR assurance on CSR disclosure provided by accounting firms tended to reduce the cost of debt capital. However, contrary to expectations, the reputation of the accounting firm (Big 4 accounting firms vs. non-Big 4 accounting firms) tasked with providing CSR assurance did not have a significant effect on the cost of debt capital. These results have implications for firms seeking an assurance provider as well as for Big 4 accounting firms. These results also provide specific evidence relevant to government agencies seeking to update policies and extend the scope of mandatory CSR assurance to other environmentally sensitive industries.

Keywords: mandatory CSR disclosure; mandatory CSR assurance; cost of debt capital; accounting firms (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/4/1768/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/4/1768/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:4:p:1768-:d:494783

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().