Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

CSR & debt funding: The impact of corporate social responsibility on borrowing costs in the market

Krusvar, Adam LU (2022) INTL01 20221
Innovation Engineering
Abstract
This paper examines the relationship between credit ratings and aggregate, as well as individual pillar CSR scores during the periods of 2009 and 2014 for European corporations. The results indicate that the aggregate CSR scores did not influence credit ratings for either period. However, social pillar scores had a statistically significant impact on credit ratings during the financial crisis of 2009, but not during the 2014 period. Furthermore, the 2009 relationship is driven by firms that perform especially well in terms of social pillar performance, and firms that performed poorly saw their credit rating unaffected. The 2009 relationship is deemed to be a factor of society valuing social pillar CSR efforts more highly during a period... (More)
This paper examines the relationship between credit ratings and aggregate, as well as individual pillar CSR scores during the periods of 2009 and 2014 for European corporations. The results indicate that the aggregate CSR scores did not influence credit ratings for either period. However, social pillar scores had a statistically significant impact on credit ratings during the financial crisis of 2009, but not during the 2014 period. Furthermore, the 2009 relationship is driven by firms that perform especially well in terms of social pillar performance, and firms that performed poorly saw their credit rating unaffected. The 2009 relationship is deemed to be a factor of society valuing social pillar CSR efforts more highly during a period with plenty of societal hardship. Hence, corporate managers should aim to identify which CSR pillar is of special importance at present to reap the benefits on the corporations' cost of debt in capital markets. Furthermore, managers should maintain a flexible organization as it pertains to CSR work, in order to quickly pivot into areas where the benefit for the organization is the largest. (Less)
Please use this url to cite or link to this publication:
author
Krusvar, Adam LU
supervisor
organization
course
INTL01 20221
year
type
M2 - Bachelor Degree
subject
keywords
CSR, credit ratings, strategy, cost of debt
language
English
id
9085305
date added to LUP
2022-06-08 11:38:04
date last changed
2022-06-08 11:38:04
@misc{9085305,
  abstract     = {{This paper examines the relationship between credit ratings and aggregate, as well as individual pillar CSR scores during the periods of 2009 and 2014 for European corporations. The results indicate that the aggregate CSR scores did not influence credit ratings for either period. However, social pillar scores had a statistically significant impact on credit ratings during the financial crisis of 2009, but not during the 2014 period. Furthermore, the 2009 relationship is driven by firms that perform especially well in terms of social pillar performance, and firms that performed poorly saw their credit rating unaffected. The 2009 relationship is deemed to be a factor of society valuing social pillar CSR efforts more highly during a period with plenty of societal hardship. Hence, corporate managers should aim to identify which CSR pillar is of special importance at present to reap the benefits on the corporations' cost of debt in capital markets. Furthermore, managers should maintain a flexible organization as it pertains to CSR work, in order to quickly pivot into areas where the benefit for the organization is the largest.}},
  author       = {{Krusvar, Adam}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{CSR & debt funding: The impact of corporate social responsibility on borrowing costs in the market}},
  year         = {{2022}},
}