Media, reputational risk, and bank loan contracting

Becchetti, Leonardo; Manfredonia, Stefano

doi:10.1016/j.jfs.2022.100990

Cited by 33 publications

(6 citation statements)

References 49 publications

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“…To further ensure the robustness of our findings, we explore an alternative metric to gauge corporate reputational exposure. We follow the popular practice in the existing literature (Becchetti & Manfredonia, 2022; and Cui et al., 2018) and adopt the Reputational Exposure Index as an alternative measure of reputational exposure rating. Reputational Exposure Index dynamically captures and quantifies reputational exposure related to ESG incidents and varies from 0 (lowest) to 100 (highest).…”

Section: Resultsmentioning

confidence: 99%

Corporate pollution and reputational exposure

Chortareas,

Kou,

Ventouri

2024

Financial Market

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We study the empirical association between corporate pollution and reputational exposure using a sample of 745 U.S. firms from 2007 to 2019 and an ordered probit model. Our results reveal an inverse relationship between chemical emissions and reputational exposure rating, after controlling for various firm attributes. We examine the roles of corporate governance structure and the demographic background of the top management team in the transmission process from polluting chemical emissions to reputation. Further, the negative impact of corporate pollution on reputational exposure rating is much stronger in areas where residents are convinced that climate change is happening. We perform several tests and analyses designed to mitigate endogeneity issues and correct sample bias to ensure the robustness of our findings. Finally, our results suggest that the negative effect is stronger for companies with higher information asymmetry, which indicates the importance of information transparency for firms' credibility.

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Section: Resultsmentioning

confidence: 99%

Corporate pollution and reputational exposure

Chortareas,

Kou,

Ventouri

2024

Financial Market

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“…For example, Hrazdil et al (2023) find that negative news coverage of adverse climate incidents of borrowers causes banks to increase the interest rates they impose on borrowers. Becchetti and Manfredonia (2022) also show that negative media attention on corporate social responsibility increases the cost of bank loans. Negative media coverage of corporate misconduct is so harmful that it may eliminate the benefit of a positive social reputation on firm performance (Hou, 2019).…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 95%

Social reputation, loan contracting and governance mechanisms

Kuzey,

Hamrouni,

Uyar

et al. 2024

IJAIM

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Purpose This study aims to investigate whether social reputation via corporate social responsibility (CSR) awarding facilitates access to debt and decreases the cost of debt and whether governance mechanisms moderate this relationship. Design/methodology/approach The sample covers the period between 2002 and 2021, during which CSR award data were available in the Thomson Reuters Eikon/Refinitiv database. The empirical models are based on country, industry and year fixed-effects regression. Findings While the main findings produced an insignificant result for access to debt, they indicated strong evidence for the positive relationship between CSR awarding and the cost of debt. Moreover, the moderating effect highlights that while the sustainability committee helps CSR-awarded companies access debt more easily, independent directors help firms decrease the cost of debt via CSR awarding. Furthermore, the results differ between the US and the non-US samples, earlier and recent periods, high- and low-leverage firms and large and small firms. Originality/value For the first time, to the best of the authors’ knowledge, the authors assess whether social reputation via CSR awarding facilitates access to debt and decreases the cost of debt in an international and cross-industry sample. Little is known about the effect of social reputation on loan contracting, although social reputation conveys broader information that goes beyond the firm’s internal (performance) and external (reporting) CSR practices. The authors also draw attention to the differing roles of distinct governance mechanisms in leveraging social reputation for loan contracting.

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“…This is because the application of these strategies limits the opportunities for firms to apply cost savings and increases the likelihood of firms being penalized by internal and external stakeholders (Chen, Guo, Hsiao, & Chen, 2018). In addition, research finds that CSI can negatively impact other financial performance factors, such as increasing the levels of financial risk (Kolbel et al, 2017; Oikonomou, Brooks, & Pavelin, 2012), idiosyncratic risk (Price & Sun, 2017), initial public offering (IPO) pricing (Huang, Yan, & Chan, 2021), and bank borrowing costs (Becchetti & Manfredonia, 2022).…”

Section: Research Framework and Findingsmentioning

confidence: 99%

Corporate Social Irresponsibility in Business: A Systematic Literature Review and Future Agenda

Tan,

Wu,

Zhong

2024

Manag. Organ. Rev.

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Despite increased interest in corporate social irresponsibility (CSI) among business scholars, the current research is still fragmented, its findings lacking a nuanced understanding. We conduct a systematic literature review of 173 journal articles on CSI published in the field of business and synthesize insights regarding the antecedents, consequences, and mechanisms of CSI. We begin by providing a clear definition, distinct types, and the measurement methods of CSI. Then, we provide a comprehensive research framework that demonstrates the three key components of CSI research: antecedent, consequence, and moderating. Building on this, we identify additional specific research methods for each component and apply them to assess and analyze the existing research findings and research gaps concerning CSI. We suggest that scholars pay more attention to (a) the impact of stakeholders on CSI behavior, (b) the different impacts of CSI on firm performance, (c) the relationship among CSI, corporate social responsibility, and firm performance, (d) CSI in the context of emerging economies, and (e) measuring CSI.

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Media, reputational risk, and bank loan contracting

Cited by 33 publications

References 49 publications

Corporate pollution and reputational exposure

Corporate pollution and reputational exposure

Social reputation, loan contracting and governance mechanisms

Corporate Social Irresponsibility in Business: A Systematic Literature Review and Future Agenda

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