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Article
Publication date: 6 February 2024

Sourour Ben Saad, Mhamed Laouiti and Aymen Ajina

This study aims to provide further insights into the connection between corporate social responsibility (CSR) and companies’ credit ratings, while also exploring the role of…

Abstract

Purpose

This study aims to provide further insights into the connection between corporate social responsibility (CSR) and companies’ credit ratings, while also exploring the role of corporate governance as a moderating factor. The hypotheses for this relationship are rooted in both legitimacy and stakeholder theories.

Design/methodology/approach

Using a sample of French non-financial listed firms from 2007 to 2020, this paper uses the ordered probit model introduced by Greene (2000). The issue of endogeneity has also been addressed.

Findings

The study reveals that CSR practices positively impact companies’ credit ratings by enhancing solvency and financial performance. Specifically, firms that prioritize CSR, particularly in the social and environmental dimensions (such as community relations, diversity, employee relations, environmental performance and product characteristics), tend to have higher credit ratings and a reduced risk of default. This suggests that credit rating agencies likely incorporate CSR performance when assigning credit ratings. Furthermore, the quality of corporate governance acts as a moderator, strengthening the relationship between CSR and credit ratings. The findings remain robust even after accounting for key firm attributes and addressing potential endogeneity between CSR and credit ratings.

Practical implications

This research provides valuable guidance for policymakers, corporate managers, investors and other stakeholders, as it offers insights into the influence of CSR activities on risk premiums and financing costs. For financial institutions, expanding credit decisions to encompass non-financial factors such as CSR can result in more accurate predictions of firm credit quality compared to relying solely on financial indicators.

Originality/value

To the best of the authors’ knowledge, this study stands out as the first to systematically examine the relationship between CSR and credit ratings within the French context. Moreover, it distinguishes itself by investigating the moderating influence of corporate governance on this relationship, setting it apart from prior research.

Details

Review of Accounting and Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1475-7702

Keywords

Article
Publication date: 6 December 2023

Sri Yogi Kottala and Atul Kumar Sahu

Ergonomics usually reciprocate the study about people fitness toward working environment. In addition, financial distress refers a condition of organizations incompetency in…

Abstract

Purpose

Ergonomics usually reciprocate the study about people fitness toward working environment. In addition, financial distress refers a condition of organizations incompetency in generating sufficient revenues or incomes, which thereby refrain them to pay their financial obligations. This study aims to evaluate two independent organizational fields named as ergonomics in first phase and financial distress in manufacturing organization behavior in the second phase. The study presented a resiliency framework for operations and strategic management in the third phase based on various facts received from the distress organizations.

Design/methodology/approach

A questionnaire survey based on plant-visit is presented. The study embedded two segments to explicate its novelty. In the first segment, the plant-visit case study is presented and in the second segment, an exploratory data related to financial distress is presented. The study tried to communicate observations related to multiple decision-making fields in single umbrella, where multiple concepts like ergonomics and financial distress of organizations as well as employees are presented. DEMATEL-ANP integrated approach is used to represent the critical financial distress dimensions of employees and their ranking.

Findings

The study provided insights toward connecting two independent fields named as ergonomics and financial distress in single umbrella. The study can benefit practitioners in designing policies and procedures in their planning model to effectively achieve organizational goals. The study presented 14 financial distress drivers of employees and advocated the aggregation of ergonomics and financial distress toward developing a holistic framework for attaining organization goals for sustainability.

Originality/value

The study presented a comprehensive understanding about multiple organization decision-making fields toward developing a holistic approach from different aspects for attaining organizational sustainability. The study can be fruitful in stimulating cross-pollination of ideas between researchers and provides a good understandability of ergonomics and financial distress in single roof.

Details

The Learning Organization, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-6474

Keywords

Article
Publication date: 23 June 2022

Fatimazahra Bendriouch, Imad Jabbouri, Mohamed M'hamdi, Harit Satt, Sara Katona and Rhita Serir

This paper explores the factors that shape the complexity of company annual reports in the USA. Using a general-to-specific modeling approach, this study examines the determinants…

Abstract

Purpose

This paper explores the factors that shape the complexity of company annual reports in the USA. Using a general-to-specific modeling approach, this study examines the determinants of annual reports' tone complexity.

Design/methodology/approach

Negative relationships were found between agency problems and tone; agency costs and readability of annual reports; profitability and tone; and ownership structure and tone complexity.

Findings

These relationships helped to confirm several of this study’s hypotheses, whereas positive associations were found between investment growth opportunities and tone complexity, which contradicts one of our initial hypotheses. Findings reveal that the more complex the language in an annual report is, the more difficult it is to strategically make a judgment or decision about the reported financial situation.

Originality/value

Analyzing these variables allows security analysts and investors to obtain important information, not available in the financial statements, which would enhance their understanding of the firm and improve their recommendations and investment decision-making process.

Details

Review of Behavioral Finance, vol. 15 no. 6
Type: Research Article
ISSN: 1940-5979

Keywords

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