Business, Management and Accounting
4 years ago

Companies with strong social responsibility pay lower cost of capital

Borsa Istanbul Review
How does corporate social responsibility affect the cost of equity capital through operating risk?
Bo Chen, Aojie Zhang

Paper Summary

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The study looked at how companies being socially responsible affects how much money they have to pay to investors. They found that companies that do good things for society tend to have lower costs for getting money from investors. They also found that these companies tend to have lower risks in their day-to-day operations. The study showed that the level of risk in a company's operations plays a role in how much they have to pay to investors. Overall, being socially responsible can help companies save money and reduce risks in their business.