What is it about?
We study the impact of institutional Corporate Social Responsibility (CSR)- CSR targeted at a firm’s secondary stakeholders- on bank loans. Findings suggest institutional CSR has a negative impact on loan spread. In addition, institutional CSR reduces the positive effects of loan maturity and firm leverage on spread. These effects were strongest among firms that demonstrated superior performance rather than among firms that showed mixed performance in terms of their secondary stakeholder related activities. Our study indicates institutional CSR reduces risk and preserves value independent of the effects of CSR targeted at primary stakeholders.
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Why is it important?
Our study indicates institutional CSR reduces risk and preserves value independent of the effects of CSR targeted at primary stakeholders.
Perspectives
Given the increase in resources that are being dedicated to CSR, an enduring question that remains of interest to academics, managers and policymakers is, does CSR confer any benefits on a firm and its stakeholders. Our study has helped shed light on this question.
Dr. Pamela J Harper
Marist College
Read the Original
This page is a summary of: The Effects of Institutional Corporate Social Responsibility on Bank Loans, Business & Society, May 2016, SAGE Publications,
DOI: 10.1177/0007650316647952.
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