Investigating the Effect of Corporate Social Responsibility and Executive Compensation on the Cost of Equity in the Presence of COVID-19 Pandemic Applied on Egyptian Listed Firms

Abstract

A business must be responsible to itself as well as its shareholders before it can be socially conscious. CSR-focused businesses frequently develop their operations to a level where they can support the community. As a result, multinational businesses frequently employ CSR as a strategy. After all, a company has a greater need to establish the bar for moral conduct among its peers, rivals, and industry the more well-known and prosperous it becomes. Consequently, the main goal of this research project to search how executive compensation tied to the accomplishment of SD objectives and CSR affect the equity cost. Additionally, this study looks at how COVID 19 affects the price of stock. Using the control factors of firm size, leverage, and polluting sector. The reports of non-financial institutions of Egyptian companies listed in the stock market in compliance with the EGX 100 between 2011 and 2020 are the primary source of secondary data. Based on the results of the analysis of the normality and multicollinearity testing to the data under study, the OLS method could not be used. Therefore, the GLS method is the suitable method to be adopted in this research. After data collection, this research uses GLS analysis and Hausman test, in order to measure the fixed effect versus the random effect. The necessary information was gathered using secondary data obtained from financial reports of non-financial institutions. The findings proved that CSR and executive compensation have direct positive significant effect on cost of equity.