The Link between Social Rating and Financial Capital Structure

摘要: This article focuses on the link between a firm’s corporate financial structure and its social rating. We propose new general model showing that less socially engaged firms issue more debt in order to avoid market penalties experienced by non-socially responsible firms. With growing investor interest responsibility, these non-SR bear higher financing cost when issuing equity capital. However, they can at same as their SR counterparts given banks do not take into account criteria rate determinations. Debt will thus be preferred companies while advantage of tested main implications our European market. Our sample consists 562 which were rated Vigeo rating agency from 1999 2007. use regression methodology study ratio regressions used for explaining firm ratios include various control variables (as explanatory variables) such bankruptcy costs, tax rates, adverse selection variables. results show with lower tend exhibit or increasing over period 1999-2007. In particular, considering top bottom quartile term rating, has negative highly significant influence ratio. Moreover, we get variation each dimension except environmental community involvement ones. Globally, seem is way low commitment penalty.