The Relationship between Corporate social Responsibility and Equity Costs, Considering the Protection of Investors

The cost of equity plays a crucial role in financing and investment decisions. Investors tend to invest in stocks of companies which their cost of equity is low, therefore, factors affecting the cost of equity are important from both theoretical and practical point of view. Corporate social responsibility activities can reduce equity costs. But this can be achieved within the mechanism of protection of investors. In this research, we tried to investigate the relationship between corporate social responsibility activities and investor protection with equity costs. For this purpose, a multivariate panel data model has been used. The data used in this study were extracted from 116 active companies in Tehran Stock Exchange during the period of 2011-2017. The results of this research show that corporate social responsibility activities in companies that protect the investor at a high level lead to a reduction in equity costs.