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:: year 12, Issue 46 (2020) ::
quarterly financial accounting journal 2020, 12(46): 126-100 Back to browse issues page
Investigating the Effect of Incentive Contracts on the Relationship between Corporate Social Responsibility Reporting with Idiosyncratic Risk and Cost of Capital
Khatereh Kargarpour, Vali Khodadadi 1, Alireza Jorjorzadeh, Allah Karam Salehi, Ahmad Kaab Omeir
Abstract:   (417 Views)
In this research, the effect of social responsibility reporting on idiosyncratic risk and capital cost has been investigated theoretically according to three main arguments: stakeholder theory, information asymmetry, and risk management. It also goes beyond and the effect of incentive contracts (managerschr(chr('39')39chr('39')) remuneration and managerial ownership) are reviewed on this relationship. In line with the research objectives, 142 companies listed on the Tehran Stock Exchange have been selected through the systematic elimination method from 2010 to 2018 and the research hypotheses have been tested using the panel data regression model. The results of the study showed that disclosure of social responsibility information through increased transparency, reduced uncertainty, stakeholder satisfaction, and positive market signals; reduced idiosyncratic risk and financing costs. It was also found that directorschr(chr('39')39chr('39')) remuneration by reducing social responsibility reporting lead to an increase in the cost of capital, but managerial ownership by increasing social responsibility reporting lead to reduced capital costs and idiosyncratic risk. Therefore, it can be seen that compared with remuneration incentives, equity incentives lead to stronger motivations to limit managerschr(chr('39')39chr('39')) short-term actions and encourage them to disclose social responsibility information.
Keywords: Social Responsibility Reporting, Idiosyncratic Risk, Cost of Capital, Managers' Remuneration, Managerial Ownership.
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Type of Study: Research | Subject: Special
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Kargarpour K, Khodadadi V, Jorjorzadeh A, Salehi A K, Kaab Omeir A. Investigating the Effect of Incentive Contracts on the Relationship between Corporate Social Responsibility Reporting with Idiosyncratic Risk and Cost of Capital. quarterly financial accounting journal. 2020; 12 (46) :126-100
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year 12, Issue 46 (2020) Back to browse issues page
فصلنامه حسابداری مالی Quarterly Financial Accounting
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