The purpose of this study is to investigate the relationship of cost of debt and corporate social responsibility (CSR) practice of mining industry. A lot of research has been conducted to point out the benefits of CSR on financial performances and cost of equity. Cost of debt is also assumed that it generally has negative relationship with the CSR implementation. However, in mining industry, extractive products are controversy and many mining legacies induce higher amount of investment and guarantee funds on the natural safety. Using a sample of 88 mining firms obtained in Asset4 Thompson Reuter, panel regression is used to analyze the model during the period 2002 to 2017. The results show that additional investment in CSR would result in the rise of cost of debt because it is considered as over-investment. This result contributes to the current literature that suggests investing much on CSR might not an optimal choice for mining industry. In the future, other dimensions in CSR constitution should be investigated in order to figure out the significant elements that would be beneficial to reduce default risk and cost of debt.

Ali, W., Frynas, J. G., & Mahmood, Z. (2017). Determinants of corporate social responsibility (CSR) disclosure in developed and developing countries: A literature review. Corporate Social Responsibility and Environmental Management, 24(4), 273-294.
Bae, S. C., Chang, K., & Yi, H.-C. (2016). The impact of corporate social responsibility activities on corporate financing: a case of bank loan covenants. Applied Economics Letters, 23(17), 1234-1237.
Barnea, A., & Rubin, A. (2010). Corporate social responsibility as a conflict between shareholders. Journal of business ethics, 97(1), 71-86.
Barth, F., Hübel, B., & Scholz, H. (2019). ESG and Corporate Credit Spreads: Evidence from Europe. Available at SSRN 3179468.
Becchetti, L., Ciciretti, R., & Hasan, I. (2015). Corporate social responsibility, stakeholder risk, and idiosyncratic volatility. Journal of Corporate Finance, 35, 297-309.
Blowfield, M., & Murray, A. (2014). Corporate responsibility: Oxford University Press.
Borisova, G., Fotak, V., Holland, K., & Megginson, W. L. (2015). Government ownership and the cost of debt: Evidence from government investments in publicly traded firms. Journal of Financial Economics, 118(1), 168-191.
Bradley, M., & Chen, D. (2015). Does board independence reduce the cost of debt? Financial Management, 44(1), 15-47.
C. REICHL, M. S., G. ZSAK. (2018). World Mining Data. International Organizing Committee for the World Mining Congresses, 33, 17.
Campbell, B. (2012). Corporate Social Responsibility and development in Africa: Redefining the roles and responsibilities of public and private actors in the mining sector. Resources Policy, 37(2), 138-143.
Chen, L., Feldmann, A., & Tang, O. (2015). The relationship between disclosures of corporate social performance and financial performance: Evidences from GRI reports in manufacturing industry. International Journal of Production Economics, 170, 445-456.
Chen, L., & Zhao, X. (2006). On the relation between the market-to-book ratio, growth opportunity, and leverage ratio. Finance Research Letters, 3(4), 253-266.
Chen, L. H., & Silva Gao, L. (2012). The pricing of climate risk. Journal of Financial and Economic Practice, Vol12 (2), Spring, 115-131.
Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to finance. Strategic management journal, 35(1), 1-23.
Dahlsrud, A. (2008). How corporate social responsibility is defined: an analysis of 37 definitions. Corporate social responsibility and environmental management, 15(1), 1-13.
Damodar, N. (2004). Basic econometrics: The Mc-Graw Hill.
Das, N., & Mishra, N. (2015). Assessing the impact of coal mining on diversified sources of rural livelihoods: A case study in the Ib Valley coalfield area of western Odisha, India. International Research Journal of Social Sciences, 4(6), 83-88.
Dashwood, H. (2012). The Rise of Global Corporate Social Responsibility: Cambridge: Cabridge University Press.
Flammer, C. (2015). Does corporate social responsibility lead to superior financial performance? A regression discontinuity approach. Management Science, 61(11), 2549-2568.
Francis, J., LaFond, R., Olsson, P., & Schipper, K. (2005). The market pricing of accruals quality. Journal of accounting and economics, 39(2), 295-327.
Franks, D. M. (2015). Mountain movers: Mining, sustainability and the agents of change: Routledge.
Franks, D. M., Davis, R., Bebbington, A. J., Ali, S. H., Kemp, D., & Scurrah, M. (2014a). Conflict translates environmental and social risk into business costs. Proceedings of the National Academy of Sciences, 111(21), 7576-7581.
Franks, D. M., Davis, R., Bebbington, A. J., Ali, S. H., Kemp, D., & Scurrah, M. (2014b). Conflict translates environmental and social risk into business costs. Proceedings of the National Academy of Sciences, 201405135.
Frederiksen, T. (2018). Corporate social responsibility, risk and development in the mining industry. Resources Policy, 59, 495-505.
Gorey, P., Morrison-Saunders, A., Doepel, D., Mtegha, H., & McHenry, M. (2014). Dealing with mining legacies: from bonds to a central mining rehabilitation fund in Western Australia.
Goss, A., & Roberts, G. S. (2011). The impact of corporate social responsibility on the cost of bank loans. Journal of Banking & Finance, 35(7), 1794-1810.
Graetz, G., & Franks, D. M. (2016). Conceptualising social risk and business risk associated with private sector development projects. Journal of Risk Research, 19(5), 581-601.
Gray, P., Koh, P. S., & Tong, Y. H. (2009). Accruals quality, information risk and cost of capital: Evidence from Australia. Journal of Business Finance & Accounting, 36(1‐2), 51-72.
Gregory, C. E. (1980). A concise history of mining: Pergamon Press New York.
Grunert, J., Norden, L., & Weber, M. (2005). The role of non-financial factors in internal credit ratings. Journal of Banking & Finance, 29(2), 509-531.
Hair, J. F., Anderson, R. E., Tatham, R. L., & William, C. (1998). Black (1998), Multivariate data analysis: Upper Saddle River, NJ: Prentice Hall.
Hartman, H. L., & Mutmansky, J. M. (2002). Introductory mining engineering: John Wiley & Sons.
Hilson, G. (2012). Corporate Social Responsibility in the extractive industries: Experiences from developing countries. Resources Policy, 37(2), 131-137.
Hoepner, A., Oikonomou, I., Scholtens, B., & Schröder, M. (2016). The effects of corporate and country sustainability characteristics on the cost of debt: An international investigation. Journal of Business Finance & Accounting, 43(1-2), 158-190.
Izzo, M. F., & Magnanelli, B. S. (2012). Does it pay or does firm pay? The relation between CSR performance and the cost of debt. The Relation between CSR Performance and the Cost of Debt (January 16, 2012).
Jenkins, H. (2004). Corporate social responsibility and the mining industry: conflicts and constructs. Corporate Social Responsibility and Environmental Management, 11(1), 23-34.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360.
Jiraporn, P., & Chintrakarn, P. (2013). Corporate social responsibility (CSR) and CEO luck: are lucky CEOs socially responsible? Applied Economics Letters, 20(11), 1036-1039.
Jung, J., Herbohn, K., & Clarkson, P. (2018). Carbon risk, carbon risk awareness and the cost of debt financing. Journal of Business Ethics, 150(4), 1151-1171.
Kao, E. H., Yeh, C.-C., Wang, L.-H., & Fung, H.-G. (2018). The relationship between CSR and performance: Evidence in China. Pacific-Basin Finance Journal, 51, 155-170.
Kemp, D. (2010). Community relations in the global mining industry: exploring the internal dimensions of externally orientated work. Corporate Social Responsibility and Environmental Management, 17(1), 1-14.
La Rosa, F., Liberatore, G., Mazzi, F., & Terzani, S. (2018). The impact of corporate social performance on the cost of debt and access to debt financing for listed European non-financial firms. European Management Journal, 36(4), 519-529.
Lee, D. D., & Faff, R. W. (2009). Corporate sustainability performance and idiosyncratic risk: A global perspective. Financial Review, 44(2), 213-237.
Magnanelli, B. S., & Izzo, M. F. (2017). Corporate social performance and cost of debt: the relationship. Social Responsibility Journal, 13(2), 250-265.
Makni, R., Francoeur, C., & Bellavance, F. (2009). Causality between corporate social performance and financial performance: Evidence from Canadian firms. Journal of Business Ethics, 89(3), 409.
Mengze, H., & Wei, L. (2015). A Comparative Study on Environment Credit Risk Management of Commercial Banks in the Asia‐Pacific Region. Business Strategy and the Environment, 24(3), 159-174.
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of financial economics, 13(2), 187-221.
Oikonomou, I., Brooks, C., & Pavelin, S. (2014). The effects of corporate social performance on the cost of corporate debt and credit ratings. Financial Review, 49(1), 49-75.
Owen, J. R., & Kemp, D. (2015). Mining-induced displacement and resettlement: A critical appraisal. Journal of Cleaner Production, 87, 478-488.
Preston, L. E., & O'bannon, D. P. (1997). The corporate social-financial performance relationship: A typology and analysis. Business & Society, 36(4), 419-429.
Rhou, Y., Singal, M., & Koh, Y. (2016). CSR and financial performance: The role of CSR awareness in the restaurant industry. International Journal of Hospitality Management, 57, 30-39.
Sarkar, S., & Searcy, C. (2016). Zeitgeist or chameleon? A quantitative analysis of CSR definitions. Journal of Cleaner Production, 135, 1423-1435.
Spicer, B. H. (1978). Investors, corporate social performance and information disclosure: An empirical study. Accounting Review, 94-111.
Starks, L. T. (2009). EFA keynote speech:“Corporate governance and corporate social responsibility: What do investors care about? What should investors care about?”. Financial Review, 44(4), 461-468.
Thompson, P., & Cowton, C. J. (2004). Bringing the environment into bank lending: implications for environmental reporting. The British Accounting Review, 36(2), 197-218.
Waddock, S. A., & Graves, S. B. (1997). The corporate social performance–financial performance link. Strategic management journal, 18(4), 303-319.
Waldman, D. A., Siegel, D. S., & Javidan, M. (2006). Components of CEO transformational leadership and corporate social responsibility. Journal of management studies, 43(8), 1703-1725.
Weber, O., Scholz, R. W., & Michalik, G. (2010). Incorporating sustainability criteria into credit risk management. Business strategy and the environment, 19(1), 39-50.
Wu, M.-W., & Shen, C.-H. (2013). Corporate social responsibility in the banking industry: Motives and financial performance. Journal of Banking & Finance, 37(9), 3529-3547.
Zhiguo, Z., Naiqi, S., Yingshuang, W., Yongcheng, L., Yanyan, S., & Tao, H. (2011). Geological Environment Problems and Countermeasures of Shijiaying Mine in Weste| rn Beijing. Procedia Environmental Sciences, 11, 1245-1252.