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Cited by 222Corporate Social Responsibility ReportingCredit Risk and Financial RegulationsSustainable Finance and Green Bonds

The DOI matches its Crossref record; 80 of the 81 references it cites were found in a registry or an index.

Trust, social capital, and the bond market benefits of ESG performance

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Amiraslani, Hami, Lins, Karl V., Servaes, Henri, Tamayo, Ane·2023·Review of Accounting Studies
DOI 10.1007/s11142-021-09646-0
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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. The gap between E&S performance of firms in the bottom and top E&S terciles has narrowed since the financial crisis, especially in the year prior to accessing the bond market.

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Fig. 1 Characteristic-adjusted secondary market credit spreads (2007 -2019) for high- and low-E&S firms. To construct this figure, we partition our sample firms into two groups based on their E&S index at the end of 2006. We then estimate a panel regression of credit spreads as a function of all the control variables (including the governance pillar score) as well as separate monthly time dummies for high- and low-E&S firms. The figure presents the plot of these monthly dummies over time. The period of August 2008 -March 2009 (shaded area) coincides with the crisis of trust described in Sapienza and Zingales (2012) and Lins et al. (2017)
Fig. 1 Characteristic-adjusted secondary market credit spreads (2007 -2019) for high- and low-E&S firms. To construct this figure, we partition our sample firms into two groups based on their E&S index at the end of 2006. We then estimate a panel regression of credit spreads as a function of all the control variables (including the governance pillar score) as well as separate monthly time dummies for high- and low-E&S firms. The figure presents the plot of these monthly dummies over time. The period of August 2008 -March 2009 (shaded area) coincides with the crisis of trust described in Sapienza and Zingales (2012) and Lins et al. (2017)CC-BY · From the PDF

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Research works printed but not linked: 1

  1. Feldhütter, P., and S. Schaefer. (2018). The myth of the credit spread puzzle. The Review of Financial Studies 31 (8): 2897–2942.

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Metadata

Authors
Amiraslani, H., Lins, K. V., Servaes, H., & Tamayo, A.
Affiliations
  • INSEAD (SG)
  • University of Utah (US)
  • London Business School (GB)
  • Centre for Economic Policy Research (GB)
Corresponding author
Tamayo, Ane
ORCID
Venue
Review of Accounting Studies
Publisher
Springer Science and Business Media LLC
Published
2022-04-14
Volume
28
Issue
2
Pages
421-462
ISSN
  • 1380-6653 (ISSN-L)
  • 1573-7136
DOI
10.1007/s11142-021-09646-0
OpenAlex
W4226118220
Cited by
222
References
81
Citations by year
2026: 54 · 2025: 71 · 2024: 40 · 2023: 30 · 2022: 14
FWCI
28.95
Type
journal article
Language
en
Open access
Licence
Locations
  • Review of Accounting Studies (publishedVersion, cc-by)
  • London School of Economics and Political Science Research Online (London School of Economics and Political Science) (acceptedVersion)
  • London Business School Research Online (London Business School) (submittedVersion)
  • London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (submittedVersion, cc-by)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
  • Syracuse University
  • Cyprus University of Technology
  • University of Cyprus
  • University of Alberta
  • University of Exeter
  • University of Warwick
  • Bar-Ilan University
  • Université de Genève
  • Nazarbayev University
  • Economic and Social Research Council
Topics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
  • Social Sciences › Economics, Econometrics and Finance › Finance › Credit Risk and Financial Regulations
  • Social Sciences › Economics, Econometrics and Finance › Finance › Sustainable Finance and Green Bonds
Keywords
social capital, trust, ESG performance, environmental and social performance, bond spreads, bond market access, 2008 financial crisis, agency costs of debt, default risk, bond maturity, corporate governance, debt financing

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