The Impact of Corporate Social Responsibility Information on Bank Loan Interest Rate and Spread

• Main Authors: FU, MEI-HAN, 傅媺涵
• Other Authors: SHIH, YA-NAN
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/zh2uv2

碩士 === 銘傳大學 === 會計學系碩士班 === 107 === Corporate social responsibility (CSR) issues have received increasing attention not only in manufacturing and service industry but also in banking. Banks act as financial intermediaries in our society. They price and value financial assets, they monitor borrowers, they manage financial risks and they organize the payment system. By performing these functions, banks have a huge impact on society. Banks have responsibilities and obligations to keep mobility and security of financial activities and economy. If banks lend money to firms with ruining ecological environment and false operation, banks indirectly help these firms to implement opportunistic activities to our society. It injures environment, society and financial market, and raise banks’ potential litigation. In the past, banks decided loan interest rates according to borrowing firms’ financial status, credit rating, the presence of collateral, etc. With raising of CSR awareness, it is interesting to understand the value of CSR information for banks’ loan decision-making. This study examines whether the borrowing firms’ CSR information, carbon emissions and charity investment, affects banks' decision on loan interest rates? This study uses the samples of new bank lending contract from 2014 to 2016 from Taiwanese listing foodstuff and chemical industry firms that are mandated to disclose CSR report. The empirical results show that borrowing firms with lower carbon emissions bear lower loan interest rates. We think this is because the borrowing firm with lower carbon emissions implement operating activities in less negative impact on ecological environment, which imply they have lower environmental contingent liabilities and more long-term market competitiveness; therefore, banks are willing to give them lower loan interest rates, also spread will. However, bank lending decision is not affected by the charity investment of borrowing firms. It is consistent with inefficient investment viewpoint that the firm attempted to play a philanthropist to improve image and greenwash but difficultly to gain positive return of charity investment.