CSR Disclosures, CSR Awards and Corporate Governance as Determinants of the Cost of Debt: Evidence from Malaysia

Shyamala Dhoraisingam Samuel (), Sakthi Mahenthiran and Ravindran Ramasamy
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Shyamala Dhoraisingam Samuel: School of Business, Monash University Malaysia, Subang Jaya 47500, Malaysia
Sakthi Mahenthiran: College of Business Administration, Gulf University for Science and Technology, Mubarak Al-Abdullah Area, West Mishref 40006, Kuwait
Ravindran Ramasamy: Graduate Business School of Business, University Tun Abdul Razak (UNIRAZAK), Kuala Lumpur 50480, Malaysia

IJFS, 2022, vol. 10, issue 4, 1-23

Abstract: The current study examines the relationship between corporate social responsibility (CSR) disclosures, media announcements of CSR awards and a firm’s cost of debt in Malaysia. The sample consists of 104 Malaysian publicly listed companies belonging to the Edge Billion Ringgit Club between 2009 to 2015. The study uses panel data regression analysis and the ordinary least squares estimation method. The results find that the interaction between CSR disclosures and winning awards for a company’s CSR initiatives and practices lowers the cost of debt. Our study concludes that, when a company discloses more information on its CSR initiatives and practices, it reduces the cost of debt. Thus, we argue that CSR disclosures and awards can act as proxies for branding listed firms, making them more marketable and allowing them to negotiate better debt contracts. However, the study shows that politically connected companies have a higher debt cost than non-politically connected firms. Furthermore, our results indicate that smaller boards are effective, but audit committees are not effective in monitoring the board of directors in Malaysian listed firms.

Keywords: corporate governance; corporate social responsibility; reputation; CSR awards; cost of debt; Malaysia (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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