Flotation costs of seasoned equity offerings: Does corporate social responsibility matter?

This paper investigates the effect of corporate social responsibility (CSR) on flotation costs in seasoned equity offerings (SEOs). On the basis of an international sample covering 38 countries during the period 2002–2018, we find that CSR performance is negatively associated with SEO flotation costs and this negative impact is mainly attributable to issuers' engagement in CSR, particularly in environmental and social activities. We further reveal that the CSR strategies of SEO issuers are successful in reducing market-based costs as well. Overall, this paper offers critical insights for understanding the role of stakeholder-oriented practices in adding value to shareholders through equity offerings.