Review of Accounting and Finance最新文献

{"title":"Get advanced or retreat: well-informed board and bank risk-taking","authors":"Asif Saeed, Komal Kamran, Thanarerk Thanakijsombat, Riadh Manita","doi":"10.1108/raf-06-2023-0194","DOIUrl":"https://doi.org/10.1108/raf-06-2023-0194","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to examine the relationship between board structure and risk-taking, exploring how this association is influenced by advanced technologies in the banking sector.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study uses a panel sample of 22 Pakistani banks from 2011 to 2018. To test the authors’ hypothesis, the authors use regression analysis with two-way cluster robust standard errors. Further, the authors also check the robustness of the authors’ findings using alternate proxies of board structure and bank risk-taking behavior. To address endogeneity concerns, the authors use the two-stage least square technique.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>In the era of the Fourth Industrial Revolution, Pakistani banks’ digitalization is modeled by the presence of Temenos-T24/Oracle as their core banking system (software providing end-to-end operational integration). Its interactional effect with corporate governance is evaluated to implicate informed risk-taking by the board as a result of improved information access and analysis. The authors find that board size has a positive association with risk-taking, and the use of modern technology reshapes this association in the banking sector.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The contribution of this paper is twofold. First, the impact of board structure on bank risk-taking has not been extensively researched in Pakistan – a highly volatile and unpredictable economy. Second, the evaluation of the role of technology on bank risk is being researched for the very first time – a uniqueness of this paper.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140594679","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Towards a sustainable future: a comprehensive review of Green Sukuk","authors":"Rotana S. Alkadi","doi":"10.1108/raf-03-2023-0105","DOIUrl":"https://doi.org/10.1108/raf-03-2023-0105","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Green sukuk (GS) is an emerging financial tool that has gained momentum in recent years owing to increased attention being given to Islamic finance, socially responsible investing (SRI) and sustainability agendas. Yet, GS studies are fragmented, dispersed and lack comprehensive reviews. As a response to this gap in academia, this paper aims to synthesize the knowledge on GS into thematic clusters, providing a more comprehensive understanding of the subject and offering guidelines for future research.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study implemented a systematic literature review approach to analyse studies on GS that were published prior to and including June 2023. The PRISMA 2020 protocol was used in the sample selection process. A total of 62 peer-reviewed journal articles from six databases were identified and categorized into various themes.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The results suggest that previous research has predominantly focused on the areas of GS advantages, drivers, market development and potential sectors, along with challenges and recommendations to improve the market. However, it was found that some other aspects, including GS pricing, performance and purchasing intention, require further research attention. The analysis also indicated that the use of theories in the GS context was limited, with only five theories employed in just four out of the 62 articles examined. Moreover, this paper’s findings revealed that the studies employing quantitative and empirical analysis methods were limited to four articles. Geographically, most of the studies were conducted in Indonesia and Malaysia, while other countries with high-potential markets (e.g. GCC) had limited GS practices and studies.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The results of this study have several practical implications. For investors, a review of GS will provide greater insight into the understanding of the GS market, helping them make better investment decisions. For policymakers, this paper empowers them with the knowledge to make informed decisions regarding GS markets by highlighting key recommendations identified in the literature. Finally, the proposed guidelines can be used in future research.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>While Green Bonds have received significant attention, there is a dearth of research on GS and those that exist are fragmented. A systematic literature review is necessary to identify knowledge gaps for future research.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140594432","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The value of a ‘just’ firm","authors":"Rosemond Desir, Patricia A. Ryan, Lumina Albert","doi":"10.1108/raf-04-2023-0120","DOIUrl":"https://doi.org/10.1108/raf-04-2023-0120","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The study aims to investigate market reactions associated with the JUST 100 rankings published by JUST Capital, a non-profit organization, as well as differences in financial reporting quality and performance between selected firms and their industry peers.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study uses a sample of 431 firms selected as the 100 America’s Most Just Companies between 2016 and 2020 by JUST Capital. This study performs both an event study to determine whether the rankings are useful to investors and cross-sectional regression analyses on the characteristics of selected firms compared to their peers.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>This study finds that investors react positively to selected firms around the time of the release of the JUST 100 rankings, suggesting that the rankings are decision-useful. This study also finds that selected firms exhibit higher accounting quality and financial performance than their peers.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>Rankings may not be free from bias because of JUST Capital’s ownership of an exchange-traded fund.</p><!--/ Abstract__block -->\u0000<h3>Social implications</h3>\u0000<p>The findings validate the rankings as well as the methodology used by JUST Capital, as they show market participants value firms that engage in socially responsible actions through their commitment to positively impact five key stakeholder groups: employees, customers, communities, environment and shareholders.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors’ knowledge, this is the first study that shows the importance of the JUST 100 rankings for investment decisions. Considering the growing push for companies to disclose environmental, social and governance (ESG) activities, this study provides evidence to support ESG disclosure regulations.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140594434","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The impact of blue and green lending on credit portfolios: a commercial banking perspective","authors":"Nawazish Mirza, Muhammad Umar, Rashid Sbia, Mangafic Jasmina","doi":"10.1108/raf-11-2023-0389","DOIUrl":"https://doi.org/10.1108/raf-11-2023-0389","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The blue and green firms are notable contributors to sustainable development. Similar to other businesses in circular economies, blue and green firms also face financing constraints. This paper aims to assess whether blue and green lending help in optimizing the interest rate spreads and the likelihood of default.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This analysis is based on an unbalanced panel of banks from 20 eurozone countries for eleven years between 2012 and 2022. The key indicators of banking include interest rate spread and a market-based probability of default. The paper assesses how these indicators are influenced by exposure to green and blue firms after controlling for several exogenous factors.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The results show a positive relationship between green and blue lending and spread, while there is a negative link with the probability of default. This confirms that the blue and green exposure positively supports the credit portfolio both in terms of profitability and risk management.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The banking system is among the key contributors to corporate finance and to enable continuous access to sustainable finance, the banking firms must be incentivized. While many studies analyze the impact of green lending, to the best of the authors’ knowledge, this study is among the very few that extend this analysis to blue economy firms.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140594433","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Climate change and the European banking sector: the effect of green technology adaptation and human capital","authors":"Ayesha Afzal, Jamila Abaidi Hasnaoui, Saba Firdousi, Ramsha Noor","doi":"10.1108/raf-10-2023-0341","DOIUrl":"https://doi.org/10.1108/raf-10-2023-0341","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Climate change poses effect on banking sector’s risks and profitability through adaptation of green technology. This study aims to incorporates green technology adaptation in three sectors: green banking, green entrepreneurial innovation (EI) and green human resource (HR), in a model of bank’s performance. And determines the impact of climate change on bank risk and profitability.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>An assessment of profitability and risk profile of commercial banks is done for 27 European countries for 2013–2022, employing a two-step difference system-generalized method of moments estimation technique with a moderate effect of climate change by including interaction between climate change and green technology adaptation.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The results indicate that green banking increases profitability, reduces credit risk and increases liquidity risk. The results also show that green human resource increases profitability and becomes a source of credit and liquidity risks for the banks. Green EI increases credit risk and liquidity risk, while the effects of green EI on profitability vary with the use of two proxies: Green patents increase profitability and environment, social and corporate governance (ESG) scores decrease profitability.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>Supportive government initiatives, including subsidies and tax rebates to green borrowers, may take the burden of green transition off the banking sector.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This paper observes the impact of green technology adaptation in three sectors: banks, EI and HR, moderated by climate change, adding substantially to the existing literature in conceptual framework and methodology.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140153141","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"From performance to horizon: managements’ horizon and firms’ investment efficiency","authors":"Abongeh A. Tunyi, Geofry Areneke, Tanveer Hussain, Jacob Agyemang","doi":"10.1108/raf-11-2022-0319","DOIUrl":"https://doi.org/10.1108/raf-11-2022-0319","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study proposes a novel measure for management’s horizon (short-termism or myopia vs long-termism or hyperopia) derived from easily obtainable firm-level accounting and stock market performance data. The authors use the measure to explore the impact of managements’ horizon on firms’ investment efficiency.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The authors rely on two commonly used but uncorrelated measures of management performance: accounting performance (return on capital employed, ROCE) and stock market performance (average abnormal return, AAR). The authors combine these measures to develop a multidimensional framework for performance, which classifies firms into four groups: efficient (high accounting and high market performance), poor (low accounting and low market performance), myopic (high accounting and low market performance) and hyperopic (low accounting and high market performance). The authors validate this framework and deploy it to explore the relationship between horizon and firms’ investment efficiency.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>In validation tests, the authors show that management myopia (hyperopia) explains firms’ decision to cut (grow) research and development investments. Further, as expected, myopic (hyperopic) firms are associated with significantly more (less) accrual and real earnings management. The empirical tests on the link between horizon and investment efficiency suggest that myopic managers cut new investments while their hyperopic counterparts grow the same. Ultimately, the authors find that myopia (hyperopia) exacerbates(mitigates) the over-investment of free cash flow problem.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The authors introduce a framework for assessing management’s horizon using easily obtainable measures of performance. The framework explains inconsistencies in prior empirical research using different measures of performance (accounting versus market). The authors demonstrate its utility by showing that the measure explains decisions around research and development investment, earnings management and firm investments.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140006189","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Investigating accounting professionals’ intention to adopt blockchain technology","authors":"R.K. Jena","doi":"10.1108/raf-06-2023-0185","DOIUrl":"https://doi.org/10.1108/raf-06-2023-0185","url":null,"abstract":"\u0000Purpose\u0000Blockchain’s potential is so significant that business activities across all industries can be drastically altered. Furthermore, the characteristics of blockchain appear to be well-suited to accounting requirements. However, accounting professionals’ attitude and intention toward blockchain adoption are not clear, particularly in India. Thus, this study aims to investigate and evaluate accountants’ intention to adopt blockchain technology in accounting activities.\u0000\u0000\u0000Design/methodology/approach\u0000This study examined and assessed accountants’ intention to use blockchain in accounting. To effectively measure usage intention, this study extended the unified theory of acceptance and use of technology (UTAUT) model by including context-specific constructs. To empirically test and validate the proposed model, data were collected from “369” professional accountants in India.\u0000\u0000\u0000Findings\u0000The findings revealed that facilitating conditions, performance expectancy and initial trust had a significant impact on adoption. Furthermore, the regulatory framework materially moderated the association between usage intention and its predictors.\u0000\u0000\u0000Originality/value\u0000These findings provide new empirical evidence about the impact of different predictors of usage intention by extending the UTAUT model. Relevant stakeholders can refer to this pioneering study to increase the adoption of blockchain as an efficient and trustworthy system among professional accountants, particularly in developing countries such as India.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-02-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140451381","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Influence of the financial shared service center on the quality of accounting information","authors":"Junchao Zhang","doi":"10.1108/raf-08-2023-0251","DOIUrl":"https://doi.org/10.1108/raf-08-2023-0251","url":null,"abstract":"\u0000Purpose\u0000This research endeavors to assess the influence of financial shared service centers (FSSCs) on the quality of accounting information within China’s A-share listed companies. Using a multi-period difference-in-differences (DID) model, the study aims to empirically examine the correlation between the adoption of FSSCs and the quality of accounting information.\u0000\u0000\u0000Design/methodology/approach\u0000The study uses a robust methodology to evaluate the relationship between FSSCs and accounting information quality (AIQ). Leveraging the established FSSCs within China’s A-share listed companies as the treatment group, this research adopts a multi-period DID model. This approach enables a rigorous empirical examination of the influence exerted by FSSCs on the overall quality of accounting information.\u0000\u0000\u0000Findings\u0000The present study delves into the impact of FSSCs on AIQ and conducts empirical analysis using data from Chinese A-share listed companies between 2004 and 2021. The findings substantiate that: FSSCs significantly bolster the quality of accounting information, a conclusion retained even after robustness tests. Specifically, FSSCs exhibit a positive correlation with the comparability, timeliness and disclosure quality of accounting information while demonstrating no significant influence on relevance, robustness and reliability factors.\u0000\u0000\u0000Research limitations/implications\u0000First, the analysis primarily rests upon data from Chinese A-share listed companies between 2004 and 2021, potentially constraining the generalizability of findings across diverse contexts. Second, despite controlling for various factors, unobserved variables or external factors not encompassed in the model might influence the relationship between FSSCs and AIQ. Additionally, the study’s reliance solely on quantitative data confines exploration into qualitative aspects that might offer a more comprehensive understanding of FSSCs’ impact on AIQ.\u0000\u0000\u0000Practical implications\u0000This paper establishes a nuanced connection between FSSC operations and AIQ, furnishing direct empirical evidence for their economic implications and propounding a novel avenue for augmenting AIQ. And, it furnishes guidance for forthcoming FSSC development, accentuating the necessity of harnessing information technology to enhance the relevance, reliability and robustness of accounting information.\u0000\u0000\u0000Originality/value\u0000Majority of prior empirical studies assessing AIQ have focused on singular indicators, lacking a comprehensive depiction of its overall level. To address this gap, this paper pioneers the construction of a comprehensive index for AIQ, providing a holistic representation of its level. Furthermore, this study stands as the inaugural investigation into the relationship between China’s A-share listed firms’ FSSCs and the quality of accounting information.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139782974","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Influence of the financial shared service center on the quality of accounting information","authors":"Junchao Zhang","doi":"10.1108/raf-08-2023-0251","DOIUrl":"https://doi.org/10.1108/raf-08-2023-0251","url":null,"abstract":"\u0000Purpose\u0000This research endeavors to assess the influence of financial shared service centers (FSSCs) on the quality of accounting information within China’s A-share listed companies. Using a multi-period difference-in-differences (DID) model, the study aims to empirically examine the correlation between the adoption of FSSCs and the quality of accounting information.\u0000\u0000\u0000Design/methodology/approach\u0000The study uses a robust methodology to evaluate the relationship between FSSCs and accounting information quality (AIQ). Leveraging the established FSSCs within China’s A-share listed companies as the treatment group, this research adopts a multi-period DID model. This approach enables a rigorous empirical examination of the influence exerted by FSSCs on the overall quality of accounting information.\u0000\u0000\u0000Findings\u0000The present study delves into the impact of FSSCs on AIQ and conducts empirical analysis using data from Chinese A-share listed companies between 2004 and 2021. The findings substantiate that: FSSCs significantly bolster the quality of accounting information, a conclusion retained even after robustness tests. Specifically, FSSCs exhibit a positive correlation with the comparability, timeliness and disclosure quality of accounting information while demonstrating no significant influence on relevance, robustness and reliability factors.\u0000\u0000\u0000Research limitations/implications\u0000First, the analysis primarily rests upon data from Chinese A-share listed companies between 2004 and 2021, potentially constraining the generalizability of findings across diverse contexts. Second, despite controlling for various factors, unobserved variables or external factors not encompassed in the model might influence the relationship between FSSCs and AIQ. Additionally, the study’s reliance solely on quantitative data confines exploration into qualitative aspects that might offer a more comprehensive understanding of FSSCs’ impact on AIQ.\u0000\u0000\u0000Practical implications\u0000This paper establishes a nuanced connection between FSSC operations and AIQ, furnishing direct empirical evidence for their economic implications and propounding a novel avenue for augmenting AIQ. And, it furnishes guidance for forthcoming FSSC development, accentuating the necessity of harnessing information technology to enhance the relevance, reliability and robustness of accounting information.\u0000\u0000\u0000Originality/value\u0000Majority of prior empirical studies assessing AIQ have focused on singular indicators, lacking a comprehensive depiction of its overall level. To address this gap, this paper pioneers the construction of a comprehensive index for AIQ, providing a holistic representation of its level. Furthermore, this study stands as the inaugural investigation into the relationship between China’s A-share listed firms’ FSSCs and the quality of accounting information.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139842942","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Corporate social responsibility and credit rating: evidence from French companies","authors":"Sourour Ben Saad, Mhamed Laouiti, Aymen Ajina","doi":"10.1108/raf-03-2023-0106","DOIUrl":"https://doi.org/10.1108/raf-03-2023-0106","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to provide further insights into the connection between corporate social responsibility (CSR) and companies’ credit ratings, while also exploring the role of corporate governance as a moderating factor. The hypotheses for this relationship are rooted in both legitimacy and stakeholder theories.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Using a sample of French non-financial listed firms from 2007 to 2020, this paper uses the ordered probit model introduced by Greene (2000). The issue of endogeneity has also been addressed.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The study reveals that CSR practices positively impact companies’ credit ratings by enhancing solvency and financial performance. Specifically, firms that prioritize CSR, particularly in the social and environmental dimensions (such as community relations, diversity, employee relations, environmental performance and product characteristics), tend to have higher credit ratings and a reduced risk of default. This suggests that credit rating agencies likely incorporate CSR performance when assigning credit ratings. Furthermore, the quality of corporate governance acts as a moderator, strengthening the relationship between CSR and credit ratings. The findings remain robust even after accounting for key firm attributes and addressing potential endogeneity between CSR and credit ratings.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This research provides valuable guidance for policymakers, corporate managers, investors and other stakeholders, as it offers insights into the influence of CSR activities on risk premiums and financing costs. For financial institutions, expanding credit decisions to encompass non-financial factors such as CSR can result in more accurate predictions of firm credit quality compared to relying solely on financial indicators.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors’ knowledge, this study stands out as the first to systematically examine the relationship between CSR and credit ratings within the French context. Moreover, it distinguishes itself by investigating the moderating influence of corporate governance on this relationship, setting it apart from prior research.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2024-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139678255","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}