Corporate philanthropy under the CSR and its effects on access to debt financing for selected firms listed in thePhilippine Stock Exchange for the years 2008-2012

• Main Authors: Chang, Pauline Marie V., Encabo, Cara Maria T., Munoz, Carlos Alberto D., Severino, Stephen Karlo L.
• Format: text
• Language: English
• Published: Animo Repository 2015
• Subjects: Debt financing (Corporations) > Philippines; Social responsibility of business > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/6950
• Institution: De La Salle University

The group observes the effect of corporate philanthropy to firm access to debt financing for firms in the capital markets. The hypothesis was that firms that give charitably have more access to debt financing. To that end, linear regression was employed to perform the analysis, with the leverage as the dependent variable and charitable giving as the dependent variable. Control variables used in the model were industry, industry dynamism, research and development (RD), age, size, advertising intensity, resources and return on assets (ROA). The result of the linear regression showed that corporate philantrophy does not affect the firm access to debt financing, although results from control variables showed significance. The control variables that posted significant results were size, RD and ROA. The researchers believe that size is significant because a creditor would be more willing to lend to a firm with a larger asset base. Despite the risky nature of RD, firms are still able to take out loans due to its nature as an investment. ROA is computed with total debt/total assets, having a negative impact on leverage. A lower ratio implies a larger margin for borrowing, where a firm may strategically increase borrowing. The authors recommend that further research should be conducted in the field of charitable giving, as there is a scarcity of similar studies in the Philippine setting.