Targeted poverty alleviation and the cost of equity capital: Evidence from China

Chaohua He and Yun Li

Economics Letters, 2024, vol. 237, issue C

Abstract: The paper examines the impact of corporate targeted poverty alleviation (TPA) on corporate cost of equity. We find that: (1) TPA can reduce the cost of equity and integrated TPA has a more significant effect than charitable TPA; (2) The role of TPA is more pronounced in polluting companies; (3) Possible channels include signal effect, agency cost, and social investment preference. Our findings indicate that poverty could be alleviated by engaging companies seeking lower cost of equity in TPA.

Keywords: Targeted poverty alleviation; Integrated poverty alleviation; Charitable poverty alleviation; Cost of equity (search for similar items in EconPapers)
JEL-codes: G12 G32 M14 O12 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:237:y:2024:i:c:s0165176524001472

DOI: 10.1016/j.econlet.2024.111664

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