 Contribution to poverty alleviation: A waste or benefit for corporate financing?Guanming He, Zhichao Li, Ling Yu and Zhanqiang Zhou Journal of International Financial Markets, Institutions and Money, 2023, vol. 89, issue C Abstract: We investigate whether Chinese firms’ involvements in poverty alleviation affect their costs of financing. We find causal evidence that firms’ contributions to poverty alleviation result in lower cost of equity and lower cost of debt, suggesting that poverty alleviation is appreciated by both equity investors and debt investors. This result is more pronounced for non-state-owned firms, financially healthy firms, firms receiving more subsidies from local governments, and firms with larger spending in advertisements. Our mediating analyses further reveal that enhanced reputation and trust among stakeholders are the mechanisms through which corporate alleviation of poverty reduces the costs of financing. Keywords: Poverty reduction; Benefits for financing; Reputation and trust; Cost of equity; Cost of debt (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:intfin:v:89:y:2023:i:c:s1042443123001439 DOI: 10.1016/j.intfin.2023.101875 Access Statistics for this article Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely More articles in Journal of International Financial Markets, Institutions and Money from Elsevier |
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