The Bond Market Benefits of Corporate Social Capital

The Bond Market Benefits of Corporate Social Capital

Hami Amiraslani, Karl Lins, Henri Servaes, Ane Tamayo

Series number :

Serial Number: 

Date posted :

September 11 2017

Last revised :

June 14 2019
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  • CSR • 
  • social capital • 
  • trust • 
  • corporate bonds • 
  • cost of debt • 
  • financial crisis

We investigate whether a firm’s social capital, and the trust that it engenders, are viewed favorably by bondholders. Using firms’ corporate social responsibility (CSR) activities to proxy for social capital, we find no relation between CSR and bond spreads over the period 2005-2013.

However, during the 2008-2009 financial crisis, which represents a shock to trust and default risk, high-CSR firms benefited from lower bond spreads. These effects are stronger for firms with higher expected agency costs of debt. During the crisis, high-CSR firms were also able to raise more debt at lower spreads, better credit ratings, and longer maturities.


Real name:
Karl Lins
University of Utah
Real name:
Ane Tamayo