Social Responsibility Disclosure, Corporate Governance and Cost of Equity Capital

Adiputra, I Made Pradana; Siregar, Sylvia Veronica; Wardhani, Ratna

doi:10.2991/iac-17.2018.13

Cited by 3 publications

(3 citation statements)

References 21 publications

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“…erefore, investors tend to accept a lower rate of return for companies that disclose CSR information, which is directly reflected in the reduction of the cost of equity capital for companies. Globally, especially in stakeholder-oriented markets, the disclosure of social responsibility reports often brings benefits to corporate equity financing, and the reduction of equity financing costs is, to some extent, one of the motives for corporate disclosure of social responsibility information [11]. Based on this, this paper proposes the following hypothesis: H1: Companies that disclose their CSR reports receive lower cost of equity than those that do not.…”

Section: Theoretical Analysis and Research Hypothesismentioning

confidence: 99%

Construction and Analysis of Corporate Social Responsibility Report and Equity Capital Cost Algorithm Model Based on Intelligent Computing

Liu

Sun

Fang

2022

Security and Communication Networks

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In order to study the corporate social responsibility report and equity capital cost algorithm based on Intelligent Computing, this paper explores the relationship between social responsibility reports and the cost of equity capital based on the data of Chinese A-share listed companies from 2016 to 2020 using textual analysis and multiple statistical regression. The research results show that the publication of social responsibility reports by listed companies helps reduce the cost of equity capital and has a “first disclosure” effect; that is, the negative effect on the cost of equity capital tends to be more significant for companies that publish social responsibility reports for the first time; and the higher the quality of social responsibility reports, the more it helps companies to reduce their cost of equity capital.

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Section: Theoretical Analysis and Research Hypothesismentioning

confidence: 99%

Construction and Analysis of Corporate Social Responsibility Report and Equity Capital Cost Algorithm Model Based on Intelligent Computing

Liu

Sun

Fang

2022

Security and Communication Networks

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“…There was a need felt by researchers to examine the impact of the quality of CG on firm performance by taking the COE, cost capital and cost of debt as an indirect proxy for performance. However, there are few studies that investigated the impact of CG on the COE (Adiputra et al , 2017; Chen et al , 2009; Huang et al , 2009; Ramly, 2012; Regalli and Soana, 2012; Shah and Butt, 2009; Srivastava et al , 2019; Sukhahuta et al , 2016; Zhu, 2012). However Regalli and Soana (2012) and Shah and Butt (2009) found some contradicting pieces of evidence and stated that increasing the quality of CG also increases the COE.…”

Section: Introductionmentioning

confidence: 99%

The impact of corporate governance on the cost of equity

Yang

Sarwar

Ali

2019

AJAR

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Purpose In view of organizational inertia, with the occurrence of a major event, though resource rigidity minimizes, however simultaneously, it increases process rigidity, which creates difficulties in motivating managers and dealing with the agency problem. Therefore, keeping in mind the high demand created by the China–Pakistan Economic Corridor and Naya Pakistan Housing Scheme in the cement sector of Pakistan, the purpose of this paper is to investigate the impact of corporate governance (CG) on the cost of equity (COE) in the cement sector, to deal with the problems surging during and after the completion of these projects and highlight further opportunities for the cement sector of Pakistan. Design/methodology/approach CG is a qualitative concept therefore, eight proxies have been used to measure it along with the two control variables. This study uses balance panel data of six years from 2012 to 2017, collected from 18 companies of the cement sector of Pakistan. Descriptive statistics have been used to describe the data, correlation matrix to see the nature of the relationship, and Pooled OLS as the estimation technique, while to analyze the data a statistical package 13 has been used. To measure the COE, the Capital Asset Pricing Model (CAPM) has been used. Findings Regression results suggest that block ownership, insider ownership and the board size are insignificant, while CEO tenure is negatively and significantly associated with the COE. Non-executive directors, independence and CEO duality are insignificant; however, diversity is positively and significantly associated with the COE. Moreover, the mean value of the COE is 8.22 percent for the cement sector, while the coefficient of determination of the model under study is 74 percent. Research limitations/implications This paper is based on the data from the cement sector of Pakistan only. Therefore, this is the reason that these results cannot be generalized on the whole economy of Pakistan. Practical implications This study helps in finding out the COE value specific to the cement sector, which will help this sector to evaluate the capital budgeting decision more precisely and accurately than before. Moreover, the association of diversity as positive, while independence as negative with the COE highlights a room for improvement in the implementation of CG codes by SECP. This study also helps to mitigate the impact of inertia, the after-effects of high demand, and managing the agency problem in the cement sector. Originality/value This is the first study using CG data collected just after the revised promulgation of CG codes in 2012, along with a wide range of eight proxies measuring CG and its impact on the COE in the cement sector.

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“…dapat digunakan mendanai investasi dan keberlangsungan operasi perusahaan (Adiputra et al, 2018). Biaya modal dipengaruhi oleh dua faktor yaitu, faktir yang dapat dikendalikan dan faktor yang tidak dapat dikendalikan.…”

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Praktik akuntansi lingkungan dan biaya modal pada perusahaan di Indonesia

Sari

Aling

2022

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Observe the development of social responsibility, especially in the field of environment, and the performance of corporate governance in Indonesia are important factors in the company's operations. A number of companies do not participate in this disclosure activity, which will result in new costs that will be borne by the company. The high and low cost of capital owned by a company will show how much risk the company will accept in order to obtain funding for the company's sustainability. This research was conducted to produce an analysis of the effect of the level of environmental accounting practices on the cost of equity capital or the cost of debt capital and the effect of corporate governance performance on the cost of equity capital or the cost of debt capital. This study uses data on financial statements and sustainability reports of companies listed on the Indonesia Stock Exchange from 2016 to 2020. The test results show that financial environmental accounting practices and corporate governance performance consist of block ownership, board size, gender diversity, and board tenure. has a significant effect on the cost of equity capital. on the cost of debt capital, only the board size variable has a significant effect. This research encourages companies to be able to participate in the disclosure of environmental performance and corporate governance.

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Social Responsibility Disclosure, Corporate Governance and Cost of Equity Capital

Cited by 3 publications

References 21 publications

Construction and Analysis of Corporate Social Responsibility Report and Equity Capital Cost Algorithm Model Based on Intelligent Computing

Construction and Analysis of Corporate Social Responsibility Report and Equity Capital Cost Algorithm Model Based on Intelligent Computing

The impact of corporate governance on the cost of equity

Praktik akuntansi lingkungan dan biaya modal pada perusahaan di Indonesia

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