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Do creditors value corporate social responsibility disclosure? Evidence from Ghana

Christopher Boachie (Department of Banking and Finance, Central University, Accra, Ghana)
Joseph Emmanuel Tetteh (Central University, Accra, Ghana)

International Journal of Ethics and Systems

ISSN: 2514-9369

Article publication date: 3 July 2021

Issue publication date: 16 July 2021




Drawing on risk mitigation theory, this study aims to examine the link between corporate social responsibility (CSR) disclosure and the cost of debt financing (CDF). In particular, this paper seeks to determine whether firms with higher CSR disclosure scores have a lower CDF.


This paper uses a panel data analysis of non-financial Ghanaian firms listed on the Ghana Stock Exchange from 2006 to 2019. The CSR index constructed from firms’ annual reports and sustainability reports is used as a proxy for the extent of CSR information disclosures by Ghanaian companies.


The empirical results demonstrate that CDF is positively related to CSR disclosure scores. Besides, the results show that the levels of long-term debt increase with CSR disclosure in a highly risky industry. However, the finding does not meet the lenders’ expectations in terms of CSR attracting favourable debt financing sources.

Research limitations/implications

The research is based only on the quantity of the CSR information disclosed by Ghanaian companies and does not account for the quality of the CSR disclosures. The empirical model omits some control variables such as the age of the firm and external business conditions. The results should not be generalized, as the sample was based on three listed industries in Ghana for 2006–2019.


This study extends the scope of previous studies by examining the importance of CSR disclosures in financing decisions. More precisely, it focuses on the relatively little explored relationship between the extent of CSR disclosures and access to debt financing. Moreover, this study focuses on the rather interesting empirical setting of Ghana, which is characterized by its low level of CSR awareness. Achieving a better understanding of the effects of CSR information is useful for corporate managers desiring to meet lenders’ expectations and attract debt financing sources.



Boachie, C. and Tetteh, J.E. (2021), "Do creditors value corporate social responsibility disclosure? Evidence from Ghana", International Journal of Ethics and Systems, Vol. 37 No. 3, pp. 466-485.



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