Causal Relationship Model of Disclosure of CSR Information Affecting the Cost of Capital of Listed Companies in the Stock Exchange of Thailand

Abstract

The objective of this study was to investigate the causal relationship model of disclosure of corporate social responsibility information affecting the cost of capital of listed companies in the Stock Exchange of Thailand. This study focused on exploring CSR information disclosure through disclosure of environmental, economic and social information meanwhile studying the cost of capital through the cost of debt measured by interest rates on investment loans and cost of equity and valued with the expected return of the investor. The results of this study indicated that companies with greater environmental information disclosure had higher cost of debt. However, when they disclosed greater economic and social information, their cost of debt would be lower. More disclosure of environmental and social information would lower cost of equity. This implied that companies with more disclosure of environmental information are more likely to obtain higher interest rates on investment loans. If companies disclosed economic and social information, they tend to obtain lower interest rate on investment loan than normal rate. Companies disclosing environmental and social information could reduce the pressure from the expectation of investors.

Keywords: Corporate Social Responsibility Disclosure, Cost of Capital, Causal Relationship