CSR disclosure quality, CSR performance, regulatory regimesand the cost of equity capital"

Abstract

This thesis investigates whether regulatory regimes moderate the relationship between the quality of CSR disclosure and the cost of equity capital and whether they moderate the relationship between CSR performance and the cost of equity capital. Based on prior research, a distinction between four regulatory regimes is made, based on their legal tradition which lies in either the English common law or French, German or Nordic civil law. By performing a moderated multiple regression analysis, using a panel data set covering the period 2011 – 2016, that covers data from firms who operate under four different regulatory regimes, this study finds evidence that the quality of CSR disclosure only has a negative effect on cost of equity capital for firms operating under the German civil law regime. Regulatory regimes do not moderate this relationship. The results also indicate that the relationship between CSR performance and the cost of equity capital is not the same for all firms, but rather depends on under which regulatory regime a firm operates. More interestingly, regulatory regimes appear to moderate the relationship between CSR performance and the cost of equity capital.