TY - JOUR

AB - Purpose The purpose of this paper is to examine how corporate social

responsibility (CSR) reporting influences leverage ratios. In particular, this
paper aims to determine whether firms with higher CSR disclosure scores have better
access to debt financing.Design/methodology/approach This paper uses a panel data
analysis of non-financial French firms listed on the Euronext Paris Stock Exchange
and members of the SBF 120 index from 2010 to 2015. The environmental, social and
governance (ESG) disclosure scores that are collected from the Bloomberg database
are used as a proxy for the extent of ESG information disclosures by French
companies.Findings The empirical results demonstrate that leverage ratios are
positively related to CSR disclosure scores. In addition, the results show that the
levels of long-term and short-term debt increase with the disclosure of ESG
information, thus suggesting that CSR disclosures play a significant role in
reducing information asymmetry and improving transparency around companies’ ESG
activities. This finding meets the lenders’ expectations in terms of extrafinancial
information and attracts debt financing sources.Research limitations/implications
The research is based only on the quantity of the ESG information disclosed by
French companies and does not account for the quality of the CSR disclosures. The
empirical model omits some control variables (e.g. the nature of the industry, the
external business conditions and the age of the firm). The results should not be
generalized, since the sample was based on large French companies for 2010–
2015.Practical implications France is a highly regulated context that places
considerable pressure on French firms in terms of CSR policies. The French
Parliament has adopted several laws requiring transparency in the environmental,
social, and corporate governance policies of French firms. In this context, firms
often regard CSR policies as constraints rather than opportunities. This study
highlights the benefits that result from transparent CSR practices. More precisely,
it provides evidence that the high disclosure of ESG information is a pull factor
for credit providers.Originality/value This study extends the scope of previous
studies by examining the value and relevance of CSR disclosures in financing
decisions. More precisely, it focuses on the relatively little explored
relationship between the extent of CSR disclosures and access to debt financing.
This paper demonstrates how each category of CSR disclosure information (e.g.
social, environmental and governance) affects access to debt financing. Moreover,
this study focuses on the rather interesting empirical setting of France, which is
characterized by its highly developed legal reforms in terms of CSR. Achieving a
better understanding of the effects of ESG information is useful for corporate
managers desiring to meet lenders’ expectations and attract debt financing sources.
VL - 20
IS - 4
SN - 0967-5426
DO - 10.1108/JAAR-01-2018-0020
UR - https://doi.org/10.1108/JAAR-01-2018-0020
AU - Hamrouni Amal
AU - Boussaada Rim
AU - Ben Farhat Toumi Nadia
PY - 2019
Y1 - 2019/01/01
TI - Corporate social responsibility disclosure and debt financing
T2 - Journal of Applied Accounting Research
PB - Emerald Publishing Limited
SP - 394
EP - 415
Y2 - 2020/04/13
ER -