Corporate social responsibility disclosure and the cost of equity capital: The roles of stakeholder orientation and financial transparency

Dan Dhaliwal, Oliver Zhen Li, Albert Tsang, Yong George Yang

Research output: Contribution to journalArticle

159 Scopus citations

Abstract

We examine the benefits associated with corporate social responsibility (CSR) disclosure in an international setting covering 31 countries. Using variables such as the legal status of labor protection, CSR disclosure requirements, and public awareness of and attitudes toward CSR issues, we divide countries into more and less stakeholder-oriented groups. We find a negative association between CSR disclosure and the cost of equity capital; this relationship is more pronounced in stakeholder-oriented countries. We also find evidence that financial and CSR disclosures act as substitutes for each other in reducing the cost of equity capital. This study furthers our understanding of CSR disclosure and its consequences.

Original languageEnglish (US)
Pages (from-to)328-355
Number of pages28
JournalJournal of Accounting and Public Policy
Volume33
Issue number4
DOIs
StatePublished - Jul 2014

ASJC Scopus subject areas

  • Accounting
  • Sociology and Political Science

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