Corporate philanthropy, public awareness, and the cost of equity capital: Evidence from China

This study examines whether a firm's philanthropic behavior affects its cost of equity capital and whether public awareness about the firm influences this effect in the context of China. We find that firms experience an increase in their cost of equity capital when the probability or the amount of philanthropic giving increases, and this effect is moderated when firms have high public awareness. Furthermore, for firms in the eastern region or those in less competitive industries, the positive effect of corporate philanthropic giving on the cost of equity capital can be moderated as the firms' public awareness increases.