세무와회계저널 | Corporate Social Performance and Cost of Debt Capital ：Evidence from P…

Using an extensive dataset on Korean private firms from 2009 to 2018 for 137,036 firm－year observations, we report several empirical results. First, we find that higher corporate social performance is negatively associated with firms’ cost of debt capital. Hence creditors regarded high corporate social performance firms as positively and reduce cost of debt financing. Second, the negative association between corporate social performance and cost of debt capital is more pronounced in over－investment in corporate social performance firms. Finally, we conduct a variety of robustness analysis using alternative corporate social performance variable and to address various endogeneity issues using firm－fixed regressions, and our main results remain qualitatively unchanged. Therefore, the overall robustness tests support the main results in this study, which advocates for the risk mitigation perspective of corporate social performance in private firms.