Open Access Journal Article

Corporate social responsibility and the likelihood of external financing

by Shahbaz Sheikh a,* orcid
DAN Department of Management & Organizational Studies, The University of Western Ontario, London, Canada
Author to whom correspondence should be addressed.
JEA  2024, 57; 3(2), 57;
Received: 26 June 2023 / Accepted: 25 July 2023 / Published Online: 15 June 2024


This paper empirically investigates the relation between firm performance in corporate social responsibility (CSR) and the need and likelihood of external financing to test the predictions of agency and stakeholder theories. Empirical results from Logit, Linear Probability Model, OLS and Firm fixed effects regressions indicate that CSR is negatively related to the likelihood and level of external financing. Further analysis indicates that CSR has a negative and significant effect on both net equity issued (NEI) and net debt issued (NDI), the two components of external financing. Overall, the empirical results support the predictions of agency theory.

Copyright: © 2024 by Sheikh. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

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ACS Style
Sheikh, S. Corporate social responsibility and the likelihood of external financing. Journal of Economic Analysis, 2024, 3, 57.
AMA Style
Sheikh S. Corporate social responsibility and the likelihood of external financing. Journal of Economic Analysis; 2024, 3(2):57.
Chicago/Turabian Style
Sheikh, Shahbaz 2024. "Corporate social responsibility and the likelihood of external financing" Journal of Economic Analysis 3, no.2:57.
APA style
Sheikh, S. (2024). Corporate social responsibility and the likelihood of external financing. Journal of Economic Analysis, 3(2), 57.

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