Corporate Social Responsibility and Firm Debt Maturity

Mohammed Benlemlih
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Mohammed Benlemlih: CERAG - Centre d'études et de recherches appliquées à la gestion - UGA [2016-2019] - Université Grenoble Alpes [2016-2019], UGA [2016-2019] - Université Grenoble Alpes [2016-2019], CNRS - Centre National de la Recherche Scientifique

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Abstract: In this article, we extend the streams of research on the capital structure of socially responsible firms by investigating the impact of corporate social responsibility (CSR) on firm debt maturity. Using a large sample of US firms, we provide evidence that high CSR firms significantly reduce their debt maturity. In particular, our results suggest that diversity and community are the dimensions that matter the most in explaining debt maturity. In additional analyses that use a seemingly unrelated regression approach, our results show that CSR decreases the extent to which investments are financed with long-term debt and increases the extent to which investments are financed with short-term debt and shareholders' equity. Overall, these findings support the view that high CSR firms use debt maturity to manage CSR overinvestment problems and to signal their high quality and their access to the debt market.

Keywords: Corporate social responsibility; Debt maturity; Capital structure; Shareholders’ equity; Seemingly unrelated regression (search for similar items in EconPapers)
Date: 2017
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Published in Journal of Business Ethics, 2017, 144 (3), pp.491-517. ⟨10.1007/s10551-015-2856-1⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01321204

DOI: 10.1007/s10551-015-2856-1

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