CSR Disclosure and Cost of Debt of Listed Nigerian Firms

This study examines the relationship between corporate social responsibility (CSR) disclosure and the cost of debt among listed firms in Nigeria over the period 2011–2025. Drawing on a panel dataset of 148 firms listed on the Nigerian Exchange Group (NGX), the study employs fixed-effects and random-effects panel regression models to investigate whether greater CSR disclosure is associated with lower borrowing costs for firms operating in a developing-economy context. Control variables include firm size, return on assets (ROA), leverage, Big 4 auditor dummy, board independence, industry dummies, and year dummies. Grounded in signaling theory, stakeholder theory, and information asymmetry theory, the study argues that CSR disclosure serves as a credible signal to creditors, reducing perceived default risk and, consequently, the cost of debt. The results reveal a statistically significant negative relationship between CSR disclosure and the cost of debt, indicating that firms with more robust CSR reporting enjoy lower interest costs on borrowed capital. Firm size and ROA are negatively associated with the cost of debt, while leverage is positively associated with borrowing costs. Board independence and Big 4 auditing are associated with lower cost of debt, confirming the governance-quality channel. These findings contribute to the nascent but growing literature on CSR and debt markets in Sub-Saharan Africa, offering nuanced evidence that voluntary disclosure mechanisms matter even in weakly institutionalized environments. The study has important implications for regulators, creditors, boards of directors, and policymakers in Nigeria and other emerging economies.