Journal of Business Ethics

, Volume 117, Issue 4, pp 679–694 | Cite as

Corporate Social Responsibility and Credit Ratings

  • Najah Attig
  • Sadok El Ghoul
  • Omrane GuedhamiEmail author
  • Jungwon Suh


This study provides evidence on the relationship between corporate social responsibility (CSR) and firms’ credit ratings. We find that credit rating agencies tend to award relatively high ratings to firms with good social performance. This pattern is robust to controlling for key firm characteristics as well as endogeneity between CSR and credit ratings. We also find that CSR strengths and concerns influence credit ratings and that the individual components of CSR that relate to primary stakeholder management (i.e., community relations, diversity, employee relations, environmental performance, and product characteristics) matter most in explaining firms’ creditworthiness. Overall, our results suggest that CSR performance conveys important non-financial information that rating agencies are likely to use in their evaluation of firms’ creditworthiness, and that CSR investments—particularly those that extend beyond compliance behavior to reflect what is desired by society—can lead to lower financing costs resulting from higher credit ratings.


Business ethics Corporate social responsibility Credit ratings 


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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  • Najah Attig
    • 1
  • Sadok El Ghoul
    • 2
  • Omrane Guedhami
    • 3
    Email author
  • Jungwon Suh
    • 4
  1. 1.Sobey School of BusinessSaint Mary’s UniversityHalifaxCanada
  2. 2.University of AlbertaEdmontonCanada
  3. 3.University of South CarolinaColumbiaUSA
  4. 4.SKK Business SchoolSungkyunkwan UniversitySeoulKorea

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