Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315337 
Year of Publication: 
2023
Citation: 
[Journal:] Journal of Business Ethics [ISSN:] 1573-0697 [Volume:] 189 [Issue:] 3 [Publisher:] Springer Netherlands [Place:] Dordrecht [Year:] 2023 [Pages:] 507-523
Publisher: 
Springer Netherlands, Dordrecht
Abstract: 
Firms usually need to attract debt to form and grow, but increasing financial leverage also entails increased risks and costs for stakeholders, such as customers and employees. Accordingly, past research suggests that for common commercial firms (CCFs), which prioritize profits, higher leverage leads to lower sales growth and higher employment costs. However, Certified B Corporations (CBCs) distinguish themselves by having a credible prosocial mission and, therefore, might be better insulated against the adverse effects of higher leverage. Using a European multi-country matched sample of 136 CBCs and 136 CCFs, we find that the negative relationship between leverage and sales growth and the positive relationship between leverage and employment costs are weaker for CBCs than CCFs. Taken together, due to their certified prosocial mission, CBCs enjoy an advantage in debt financing compared to CCFs.
Subjects: 
B Corp social firms
Entrepreneurial finance
Social entrepreneurship
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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