Aswani, Jitendra2024-05-092022Aswani, Jitendra, Debt Markets Retort to Mandatory Corporate Social Responsibility (May 21, 2022). Pre-print, SSRN: https://ssrn.com/abstract=4499400 or http://dx.doi.org/10.2139/ssrn.44994001556-5068https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37378517This study examines the debt markets’ response to mandatory CSR as prescribed by the Indian Companies Act 2013. Implementing this rule results in a 43 basis point increase in yield spreads for compliant firms, counteracting the Act’s debt-reducing provisions. The upsurge is attributed to the negative impact of mandatory CSR on expected cash flow. Leveraging a generative artificial intelligence (AI) model, the analysis distinguishes between mandatory CSR governance and expenditure. The former modestly boosts the issue-to-sales ratio by 1.2%, while the latter significantly drives the rise in yield spreads, illuminating the complex effects of mandatory CSR on debt market behavior.en-USJournal Article2024-05-0910.2139/ssrn.4499400