Customer satisfaction and the cost of capital

• 成果类型: Article
• 署名作者: Truong, Cameron; Nguyen, Thu Ha; Huynh, Thanh
• 署名单位: Monash University; Monash University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-020-09555-8
• 发表日期: 2021
• 页码: 293-342
• 关键词: corporate social-responsibility; stock-market valuation; company reputation; IMPLIED COST; ANALYST COVERAGE; service quality; VALUE-RELEVANCE; cross-section; disclosure; earnings

摘要

Using a sample of U.S. firms from 1995 through 2015 and the customer satisfaction scores from the American Customer Satisfaction Index, we find strong evidence that firms with higher customer satisfaction scores enjoy lower cost of equity capital, even after controlling for other factors that determine the cost of equity. In addition, results from a propensity score matched sample analysis, a difference-in-differences analysis, and instrumental variable regressions suggest that our findings are robust to accounting for endogeneity. We also document that customer satisfaction is positively related to investor recognition and financial report quality. The effect of customer satisfaction on the cost of equity increases with the level of information asymmetry, consistent with customer satisfaction mitigating information asymmetry. Overall, our findings suggest that customer satisfaction lowers a firm's risk and significantly attenuates its financing costs.