Access the full text.
Sign up today, get DeepDyve free for 14 days.
J. Margolis, Hillary Elfenbein, J. Walsh (2009)
Does it Pay to Be Good...And Does it Matter? A Meta-Analysis of the Relationship between Corporate Social and Financial PerformanceOrganizations & Markets: Motivation & Incentives eJournal
D. Dhaliwal, Shane Heitzman, Oliver Li (2005)
Taxes, Leverage, and the Cost of Equity CapitalLSN: Law & Finance: Empirical (Topic)
J. Francis, Ryan LaFond, Per Olsson, K. Schipper (2005)
The market pricing of accruals qualityJournal of Accounting and Economics, 39
N. Guenster, Rob Bauer, Jeroen Derwall, K. Koedijk (2011)
The Economic Value of Corporate Eco‐EfficiencyERN: Firm Behavior (IO: Empirical) (Topic)
Marlene Plumlee, Darrell Brown, Rachel Hayes, R. Marshall (2015)
Voluntary Environmental Disclosure Quality and Firm Value: Further EvidenceJournal of Accounting and Public Policy, 34
H. Jo, M. Harjoto (2011)
Corporate Governance and Firm Value: The Impact of Corporate Social ResponsibilityJournal of Business Ethics, 103
Journal of Accounting Research, 44
J. McGuire, Alison Sundgren, T. Schneeweis (1988)
Corporate Social Responsibility and Firm Financial PerformanceAcademy of Management Journal, 31
Journal of Business Finance and Accounting, 36
K. Ness, A. Mirza (1991)
Corporate social disclosure: A note on a test of agency theoryBritish Accounting Review, 23
E. Fama, James MacBeth (1973)
Risk, Return, and Equilibrium: Empirical TestsJournal of Political Economy, 81
Beiting Cheng, I. Ioannou, George Serafeim (2011)
Corporate Social Responsibility and Access to FinanceHarvard Business School Working Papers
James Claus, Jacob Thomas (2001)
Equity Premia as Low as Three Percent? Evidence from Analysts' Earnings Forecasts for Domestic and International Stock MarketsJournal of Finance, 56
D. Dhaliwal, Oliver Li, Albert Tsang, Yong Yang (2014)
Corporate social responsibility disclosure and the cost of equity capital: The roles of stakeholder orientation and financial transparencyJournal of Accounting and Public Policy, 33
Abagail McWilliams, D. Siegel (2000)
Corporate social responsibility and financial performance: correlation or misspecification?Strategic Management Journal, 21
C. Leuz, D. Nanda, Peter Wysocki (2002)
Earnings Management and Investor Protection: An International ComparisonGlobal Business Issues eJournal
Christine Botosan, Marlene Plumlee (2002)
A Re‐examination of Disclosure Level and the Expected Cost of Equity CapitalJournal of Accounting Research, 40
Nan Sun, A. Salama, K. Hussainey, M. Habbash (2010)
Corporate environmental disclosure, corporate governance and earnings managementManagerial Auditing Journal, 25
Luzi Hail, C. Leuz
The Rodney L. White Center for Financial Research International Differences in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?
Electronic Journal of Radical Organisation Theory, 9
Haas School of Business
A. Salama (2005)
A note on the impact of environmental performance on financial performanceStructural Change and Economic Dynamics, 16
Darren Lee, R. Faff, S. Rekker (2013)
Do high and low-ranked sustainability stocks perform differently?International Journal of Accounting and Information Management, 21
Peter Clarkson, Yue Li, G. Richardson, Florin Vasvari (2006)
Does it Really Pay to Be Green? Determinants and Consequences of Proactive Environmental StrategiesSEIN Environmental Impacts of Business eJournal
A. Richardson, Michael Welker (2001)
Social disclosure, financial disclosure and the cost of equity capitalAccounting Organizations and Society, 26
M. Kimbro, Zhiyan Cao (2011)
Does voluntary corporate citizenship pay? An examination of the UN Global CompactInternational Journal of Accounting and Information Management, 19
Yawen Jiao (2010)
Stakeholder welfare and firm valueJournal of Banking and Finance, 34
Christine Botosan (2006)
Disclosure and the cost of capital: what do we know?Accounting and Business Research, 36
Kevin Chen, Zhihong Chen, K. Wei (2009)
Legal Protection of Investors, Corporate Governance, and the Cost of Equity CapitalIO: Firm Structure
Douglas Diamond, Robert Verrecchia (1991)
Disclosure, Liquidity, and the Cost of CapitalJournal of Finance, 46
The Accounting Review, 79
Ruth Aguilera, Cynthia Williams, J. Conley, D. Rupp (2006)
Corporate Governance and Social Responsibility: A Comparative Analysis of the UK and the UsCSR & Management Practice eJournal
Econometrica, 55
Mohsen Souissi, Hichem Khlif (2012)
Meta-analytic review of disclosure level and cost of equity capitalInternational Journal of Accounting and Information Management, 20
Peter Easton (2003)
Pe Ratios, Peg Ratios, and Estimating the Implied Expected Rate of Return on Equity CapitalCapital Markets: Asset Pricing & Valuation eJournal
Strategic Management Journal, 29
Supriti Mishra, Damodar Suar (2010)
Does Corporate Social Responsibility Influence Firm Performance of Indian Companies?Journal of Business Ethics, 95
Mark Sharfman, Michael Price, Chitru Fernando, Richard Bettis, Rick Johnson, Jesus Salas, Teresa Shaft, Steve Wartick (2008)
Forthcoming: Strategic Management Journal Environmental Risk Management and the Cost of Capital
Shangkun Xu, Duchi Liu, Jian-bai Huang (2015)
Corporate social responsibility, the cost of equity capital and ownership structure: An analysis of Chinese listed firmsAustralian Journal of Management, 40
R. Gray (2005)
Taking a Long View on What We Now Know About Social and Environmental Accountability and ReportingIssues in Social and Environmental Accounting, 1
George Wang, W. Hsu (2011)
Corporate Social Responsibility and Firm Performance2011 Fourth International Conference on Business Intelligence and Financial Engineering
Yasser Eliwa, J. Haslam, Santhosh Abraham (2016)
The association between earnings quality and the cost of equity capital: Evidence from the UKInternational Review of Financial Analysis, 48
P. Gray, P. Koh, Y. Tong (2009)
Accruals Quality, Information Risk and Cost of Capital: Evidence from AustraliaFinancial Accounting eJournal
Whitney Newey, K. West (1986)
A Simple, Positive Semi-Definite, Heteroskedasticity and Autocorrelationconsistent Covariance MatrixEconometrics eJournal
Maureen O'Hara, D. Easley (2001)
Information and the Cost of CapitalCorporate Finance: Valuation
Journal of Accounting and Public Policy, 30
M. Suto, Hitoshi Takehara (2017)
CSR and cost of capital: evidence from JapanSocial Responsibility Journal, 13
J. Hasseldine, Aly Salama, J. Toms (2005)
Quantity versus Quality: The Impact of Environmental Disclosures on the Reputations of UK PlcsBritish Accounting Review, 37
Working Paper, SSRN
Shaofang Li, Chao Liu (2017)
Quality of Corporate Social Responsibility Disclosure and Cost of Equity Capital: Lessons from ChinaEmerging Markets Finance and Trade, 54
Sadok Ghoul, O. Guedhami, C. Kwok, Dev Mishra (2010)
Does Corporate Social Responsibility Affect the Cost of Capital?CGN: Corporate Social Responsibility/Corporate Citizenship (Topic)
Journal of Financial Economics, 3
The British Accounting Review, 34
Janine Hogan, Sumit Lodhia (2011)
Sustainability reporting and reputation risk management: an Australian case studyInternational Journal of Accounting and Information Management, 19
R. Klassen, C. McLaughlin (1996)
The impact of environmental management on firm performanceManagement Science, 42
Y. Amihud, H. Mendelson (1986)
Asset pricing and the bid-ask spreadJournal of Financial Economics, 17
Mark Lang, Karl Lins, Mark Maffett (2011)
Transparency, Liquidity, and Valuation: International Evidence on When Transparency Matters MostKenan Institute of Private Enterprise Research Paper Series
A. Belal, S. Cooper (2011)
The absence of corporate social responsibility reporting in BangladeshCritical Perspectives on Accounting, 22
Yasser Eliwa, A. Gregoriou, A. Paterson (2019)
Accruals quality and the cost of debt: the European evidenceInternational Journal of Accounting & Information Management
Peter Clarkson, Xiaohua Fang, Yue Li, G. Richardson (2013)
The relevance of environmental disclosures: Are such disclosures incrementally informative? ☆Journal of Accounting and Public Policy, 32
Strategic Management Journal, 35
Dan Gode, Partha Mohanram (2003)
Inferring the Cost of Capital Using the Ohlson–Juettner ModelReview of Accounting Studies, 8
B. Craven, C. Marston (1999)
Financial reporting on the Internet by leading UK companiesEuropean Accounting Review, 8
Journal of Financial Economics, 69
Minna Yu, Ronald Zhao (2015)
Sustainability and firm valuation: an international investigationInternational Journal of Accounting and Information Management, 23
Michael Jensen, W. Meckling (1976)
Theory of the Firm
D. Dhaliwal, Oliver Li, Albert Tsang, Yong Yang (2011)
Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility ReportingThe Accounting Review, 86
Aris Solomon, J. Solomon, M. Suto (2004)
Can the UK Experience Provide Lessons for the Evolution of Sri in Japan?Wiley-Blackwell: Corporate Governance: An International Review
Eveline Velde, Wim Vermeir, Filip Corten (2005)
Corporate social responsibility and financial performanceCorporate Governance, 5
William Gebhardt, Charles Lee, B. Swaminathan (2000)
Toward an Implied Cost of CapitalCorporate Finance and Organizations eJournal
Journal of Accounting Research, 39
Luzi Hail, C. Leuz (2006)
International Differences in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?: international cost of equity capitalJournal of Accounting Research, 44
S. Toms (2002)
Firm Resources, Quality Signals and The Determinants of Corporate Environmental Reputation: Some UK EvidenceEnvironmental Economics eJournal
The Journal of Finance, 59
R. Kalra (2004)
Earnings Management and Investor Protection: An International ComparisonCfa Digest, 34
Cynthia Williams, J. Conley (2004)
An Emerging Third Way?: The Erosion of the Anglo-American Shareholder Value ConstructCorporate Law: Corporate Governance Law
A. Salama, Keith Anderson, S. Toms (2010)
Does Community and Environmental Responsibility Affect Firm Risk? Evidence from UK Panel Data 1994-2006Econometrics: Single Equation Models eJournal
M. Harjoto, H. Jo (2015)
Legal vs. Normative CSR: Differential Impact on Analyst Dispersion, Stock Return Volatility, Cost of Capital, and Firm ValueJournal of Business Ethics, 128
Hank Alewine, D. Stone (2013)
How Does Environmental Accounting Information Influence Attention and InvestmentInternational Journal of Accounting and Information Management, 21
Yasser Eliwa, Ahmed Aboud, Ahmed Saleh (2019)
ESG practices and the cost of debt: Evidence from EU countriesCritical Perspectives on Accounting
PurposeThere has been an ongoing call from various groups of stakeholders for social and environmental practices to be integrated into companies’ operations. A number of companies have responded by engaging in socially and environmentally responsible activities, while others choose not to participate in these activities, which incur additional costs. The absence of consensus regarding the economic implications of social and environmental practices provides the impetus for this paper. This study aims to examine the association between corporate social and environmental practices (CSEP) and the cost of equity capital measured by four ex ante measures using a sample of UK listed companies.Design/methodology/approachFirst, we undertake a review of the extant literature on CSEP. Second, using a sample of 236 companies surveyed in “Britain’s most admired companies” in terms of “community and environmental responsibility” during the period 2010-2014, we estimate four implied a cost of equity capital proxies. The relationship between a companies’ cost of equity capital and its CSEP is then calculated.FindingsThe authors find evidence that companies with higher levels of CSEP have a lower cost of equity capital. This finding determines the significant role played by CSEP in helping users to make useful decisions. Also, it supports arguments that firms with socially responsible practices have lower risk and higher valuation.Practical implicationsThe finding encourages companies to be more socially and environmentally responsible. Furthermore, it provides up-to-date evidence of the economic consequences of CSEP. The results should, therefore, be of interest to managers, regulators and standard-setters charged with developing regulations to control CSEP, as these practices are still undertaken on a voluntary basis by companies.Originality/valueTo the best of the authors’ knowledge, this is the first study to investigate the association between CSEP of British companies and their cost of equity capital. The study complements Ghoul et al. (2011), who examine the relationship between CSR and the cost of equity capital of the US sample. The authors extend Ghoul et al. (2011) by using a sample of the UK market after applying International Financial Reporting Standards.
International Journal of Accounting and Information Management – Emerald Publishing
Published: Aug 5, 2019
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.