A Matter of Trust? The Bond Market Benefits of Corporate Social Capital during the Financial Crisis

Purpose The purpose of this paper is to describe in-depth a community-based social partnership, emerged in response to the financial crisis in Greece, with members from the private, public and civic sectors, using a case example of a grass-root self-organised national network. Design/methodology/approach Formal and informal interviews as well as written communication with members of the partnership mainly formed the basis for the analysis. Topics covered formation and implementation activities, outcomes, relationship issues, such as trust and links to social capital. Findings A shared community risk and a national media campaign to increase public awareness of the issue were catalysts for individuals’ sensitisation and participation in the partnership. The shared risk was the loss of community’s social cohesion, through poverty aggravated by the financial crisis. Self-organisation led to innovative relationships, whereas trust, collective action and collaboration show social capital attributes in the partnership enabling resilience development. Research limitations/implications The research contributes in the fields of community-based partnerships and engagement in building community and crisis resilience. The findings are based on a case example. More evidence is needed in order to derive generalised statements about the partnership’s contribution to crisis resilience. Practical implications The partnership has shown impact on community engagement, health and well-being. Originality/value This paper presents a partnership type for building community and crisis resilience with the case example of one such partnership in Greece, formed to alleviate community distress caused by the crisis.

Download Full-text

Do participants in the bond market care about corporate social responsibility? Evidence from China

International Journal of Emerging Markets ◽

10.1108/ijoem-01-2021-0156 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Jun Hu ◽

Wenbin Long ◽

Yu Wang ◽

Linzi Zhou

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Bond Market ◽

Economic Consequences ◽

Corporate Bond ◽

Bond Pricing ◽

Content Type ◽

Market Participants ◽

Risk Environments ◽

Corporate Social

PurposeUsing a sample of listed Chinese companies that issued bonds from 2010 to 2019, the authors empirically test the link between CSR and corporate bond pricing, and the mechanism and channels behind this link.Design/methodology/approachThis study systematically examines whether and how corporate social responsibility (CSR) affects the corporate bond market in China.FindingsFirms with better CSR have higher corporate bond credit ratings and lower corporate bond yield spreads. These associations remain stable in robustness checks, including checks that use regional typhoon disaster as an instrumental variable. The effects of CSR are more significant for firms with a worse information environment and for those operating in high-risk environments. Better CSR is associated with less earnings management, fewer financial restatements and less analyst forecast divergence. In addition, the effects of CSR are more pronounced after the 2013 market-oriented reform and when issuers are non-state-owned enterprises.Practical implicationsBecause market participants can incorporate firms' CSR into their decision-making, establishing an effective channel for communicating CSR between issuers and market participants will enhance the effects of CSR.Social implicationsResearchers need to attend to the mechanisms behind the link between CSR and corporate bond pricing, and to the characteristics of strong environmental contingency in emerging markets, specifically the periods and scenarios in which the effects of CSR change.Originality/valueThis study provides systemic evidence that CSR benefits corporate bond pricing through both informational and reputational channels and that the effects of CSR vary by time and firm. These findings enrich the literatures on both the economic consequences of CSR and the determinants of corporate bond pricing, and provide a plausible explanation for mixed findings on the effects of CSR in previous studies.

Download Full-text