Corporate Social Responsibility and its Impact on Distance to Default and Credit Ratings – An empirical study on Banking Sector of Pakistan
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Date
2021-03
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Publisher
UMT.Lahore
Abstract
The study analyzed the impact of Corporate Social Responsibility on the Default Risk and Credit
Rating. By using the balanced panel data of 31 banks working in Pakistan, without the difference
of their scale, for the duration of 2008 to 2017. Econometric models were analyzed by using the
STATA (ver.15) software, by testing Pooled OLS and GMM models. Price to book value, Market
capitalization and E volatility are kept control variable. DD is tested through Naïve model formula
and Credit ratings are given a scale of 1 to 9 for lowest to highest i..e CCC to AAA. The results of
the study revealed overall corporate social responsibility has a significant impact on credit rating
as well as DD of banks in Pakistan.