Impact of disclosure and assurance quality of corporate sustainability reports on access to finance

Isabel‐María García‐Sánchez, Nazim Hussain, Jennifer Martínez‐Ferrero and Emiliano Ruiz‐Barbadillo

Corporate Social Responsibility and Environmental Management, 2019, vol. 26, issue 4, 832-848

Abstract: This paper investigates the impact of corporate social responsibility (CSR) disclosure quantity, quality, and external validation concerning assurance on capital constraints. We examine if these disclosure characteristics matter to the investors in the financial market, then they should be positively evaluated by financial market participants. More specifically, we study the effects of disclosure quantity, quality, and assurance on the access to financial resources for reporting firms. Analysis of data of an international sample for the period of 2007–2016 significantly supports the value relevance idea of CSR disclosure quality. We document that availability of more information about the firm's CSR initiatives eases the financial access. Furthermore, the quality and external assurance of CSR disclosure further strengthen the relationship between disclosure and access to finance. Our paper not only provides support for buying assurance but also argue for better assurance quality.

Date: 2019
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https://doi.org/10.1002/csr.1724

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:26:y:2019:i:4:p:832-848

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