This paper examines how corporate compliance with the mandatory corporate social responsibility (CSR) spending regulation affects its cost of debt and how this effect varies with family control and ownership. Utilizing a longitudinal sample of Indian listed firms, we document that compliance with the CSR spending regulation leads to a lower cost of debt, and this relationship is more salient in non-family firms than in family firms. Moreover, the attenuation effect of family firms is stronger in firms both controlled and managed by families, with larger family ownership or managed by non-founder CEOs. We also find that the efficacy of compliance in reducing the cost of borrowing is stronger in firms engaged in CSR activities before the regulatory mandate. Our results are robust to endogeneity tests, different estimation methods, and alternative measures. Overall, we demonstrate that CSR compliance conveys valuable information on firm characteristics through both signaling and screening channels, consequently affecting debtholders' evaluation of firm risk and shaping their lending decisions. However, debtholders' assessments and decisions vary with firms’ ownership and control structure.

中文翻译：

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强制性企业社会责任支出、家庭控制和债务成本

本文探讨了企业遵守强制性企业社会责任 (CSR) 支出法规如何影响其债务成本，以及这种影响如何随家族控制权和所有权的变化而变化。利用印度上市公司的纵向样本，我们发现遵守企业社会责任支出法规可以降低债务成本，而且这种关系在非家族企业中比在家族企业中更为突出。此外，家族企业的衰减效应在由家族控制和管理、拥有较大家族所有权或由非创始人首席执行官管理的公司中更强。我们还发现，在监管授权之前从事企业社会责任活动的公司，合规在降低借贷成本方面的功效更强。我们的结果对于内生性检验、不同的估计方法和替代措施是稳健的。总体而言，我们证明企业社会责任合规性通过信号和筛选渠道传达了有关公司特征的宝贵信息，从而影响债务持有人对公司风险的评估并影响其贷款决策。然而，债务持有人的评估和决策因公司的所有权和控制结构而异。