Corporate philanthropy, public awareness, and the cost of equity capital: Evidence from China

Jun Xie and Junyi Chen
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Junyi Chen: Department of Finance, School of Economics and Management, Wuhan University

Annals of Economics and Finance, 2021, vol. 22, issue 1, 153-194

Abstract: This study examines whether a firm's philanthropic behavior affects its cost of equity capital and whether public awareness about the firm influences this effect in the context of China. We find that firms experience an increase in their cost of equity capital when the probability or the amount of philanthropic giving increases, and this effect is moderated when firms have high public awareness. Furthermore, for firms in the eastern region or those in less competitive industries, the positive effect of corporate philanthropic giving on the cost of equity capital can be moderated as the firms' public awareness increases.

Keywords: Corporate Philanthropy; Cost of Equity Capital; Public Awareness; Corporate Social Responsibility (search for similar items in EconPapers)
JEL-codes: G30 M14 P31 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2021:v:22:i:1:xiechen

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