Corporate Social Responsibility (CSR) and Access to Finance Beiting Cheng, Ioannis Ioannou, and George Serafeim investigate whether superior CSR performance leads to better access to finance. They hypothesize that better access to finance is due to reduced agency costs from enhanced stakeholder engagement and reduced informational asymmetry from increased transparency. Using data from 2,439 publicly listed firms from 2002 to 2009, they find that firms with better CSR performance face significantly lower capital constraints. Both stakeholder engagement and CSR disclosure are important in reducing capital constraints. The results are confirmed using alternative measures of capital constraints, paired analysis, instrumental variables, and simultaneous equations. The relationship is driven by both the social and environmental dimensions of CSR. The paper explores the link between CSR and financial performance, noting that CSR can lead to better access to resources, attract higher quality employees, improve marketing, and gain social legitimacy. Empirical studies show mixed results, with some finding positive relationships and others negative or U-shaped. Recent studies focus on the role of capital markets in creating long-term value through CSR. The paper contributes to the literature by examining how CSR affects idiosyncratic capital constraints, showing that better CSR performance reduces capital constraints through reduced agency costs and increased transparency. Capital constraints refer to market frictions that prevent firms from funding all desired investments. Firms with better CSR performance face lower capital constraints due to better stakeholder engagement and increased transparency. The paper uses the KZ index to measure capital constraints and finds that firms with better CSR performance have lower capital constraints. The results are robust across various measures and models, including instrumental variables and simultaneous equations. The study also shows that the impact of CSR on capital constraints is driven by both social and environmental performance. The paper uses data from Thompson Reuters ASSET4 to measure CSR performance and capital constraints. It finds that firms with better CSR performance have lower capital constraints, with the effect being stronger for firms that are most capital constrained. The results are confirmed using alternative measures of capital constraints and by examining the impact of ESG ratings as a shock to CSR performance. The study also shows that CSR disclosure and stakeholder engagement significantly impact capital constraints. The findings suggest that CSR can lead to better access to finance by reducing agency costs and informational asymmetry.Corporate Social Responsibility (CSR) and Access to Finance Beiting Cheng, Ioannis Ioannou, and George Serafeim investigate whether superior CSR performance leads to better access to finance. They hypothesize that better access to finance is due to reduced agency costs from enhanced stakeholder engagement and reduced informational asymmetry from increased transparency. Using data from 2,439 publicly listed firms from 2002 to 2009, they find that firms with better CSR performance face significantly lower capital constraints. Both stakeholder engagement and CSR disclosure are important in reducing capital constraints. The results are confirmed using alternative measures of capital constraints, paired analysis, instrumental variables, and simultaneous equations. The relationship is driven by both the social and environmental dimensions of CSR. The paper explores the link between CSR and financial performance, noting that CSR can lead to better access to resources, attract higher quality employees, improve marketing, and gain social legitimacy. Empirical studies show mixed results, with some finding positive relationships and others negative or U-shaped. Recent studies focus on the role of capital markets in creating long-term value through CSR. The paper contributes to the literature by examining how CSR affects idiosyncratic capital constraints, showing that better CSR performance reduces capital constraints through reduced agency costs and increased transparency. Capital constraints refer to market frictions that prevent firms from funding all desired investments. Firms with better CSR performance face lower capital constraints due to better stakeholder engagement and increased transparency. The paper uses the KZ index to measure capital constraints and finds that firms with better CSR performance have lower capital constraints. The results are robust across various measures and models, including instrumental variables and simultaneous equations. The study also shows that the impact of CSR on capital constraints is driven by both social and environmental performance. The paper uses data from Thompson Reuters ASSET4 to measure CSR performance and capital constraints. It finds that firms with better CSR performance have lower capital constraints, with the effect being stronger for firms that are most capital constrained. The results are confirmed using alternative measures of capital constraints and by examining the impact of ESG ratings as a shock to CSR performance. The study also shows that CSR disclosure and stakeholder engagement significantly impact capital constraints. The findings suggest that CSR can lead to better access to finance by reducing agency costs and informational asymmetry.