Idiosyncratic risk and capital structure: the mediating role of corporate reputation and moderating role of corporate social responsibility

This study examines the impact of idiosyncratic risk (I.Risk) and corporate reputation (CR) on the capital structure of non-financial companies.The study incorporated a generalised method of moments (GMM) model to examine the proposed association of firm-specific factors and capital structure.The Baron and Kenny modelling is used to estimate the mediating relationship of the study.The analysis is performed on panel data from the 2010 to 2019 period of 284 listed firms on the Pakistan Stock Exchange (PSX).The research findings state that I.Risk has a negative significant effect on capital structure.In addition, the Sobel test findings evidenced that CR has significantly mediated the relationship between I.Risk and capital structure.Moreover, corporate social responsibility has significantly moderated the relationship between I.Risk and CR.