Amiraslani, H, Lins, K V, Servaes, H and Tamayo, A (2023) Trust, social capital, and the bond market benefits of ESG performance. Review of Accounting Studies, 28 (2). pp. 421-462. ISSN 1380-6653
Abstract
We investigate whether a firm’s social capital, and the trust that it engenders, are viewed favorably by bondholders. Using firms’ environmental and social (E&S) performance to proxy for social capital, we find no relation between social capital and bond spreads over the period 2006-2019. However, during the 2008-2009 financial crisis, which represents a shock to trust and default risk, high-social-capital firms benefited from lower bond spreads. These effects are stronger for firms with higher expected agency costs of debt and firms whose E&S efforts are more salient. During the crisis, high-social-capital firms were also able to raise more debt, at lower spreads, and for longer maturities. We find no evidence that the governance element of ESG is related to bond spreads.
More Details
Item Type: | Article |
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Subject Areas: | Finance |
Additional Information: |
© 2022 Springer Nature. This is a post-peer-review, pre-copyedit version of an article published in Review of Accounting Studies. The final authenticated version is available online at: https://doi.org/10.1007/s11142-021-09646-0 |
Date Deposited: | 15 Apr 2021 16:24 |
Date of first compliant deposit: | 12 Apr 2021 |
Subjects: |
Corporate responsibility Corporate bonds Social roles |
Last Modified: | 05 Nov 2024 02:47 |
URI: | https://lbsresearch.london.edu/id/eprint/1756 |