Objective: Social responsibility addresses ethical issues about the company's behavior and decisions on issues such as human resource management, environmental support, occupational health, social relationships, and relationships with suppliers and customers. One of the tasks of companies in the field of social responsibility is to help improve the economic situation and welfare of society, and on the other hand, financial reporting is done with the aim of providing correct information for correct financial decisions and thus economic growth. Therefore, it is expected that by implementing the social responsibility mechanism, companies' financial decisions will also be affected. Therefore, in this study, the relationship between social responsibility and financial leverage in member companies of the Tehran Stock Exchange has been investigated.



Methods: In order to investigate this issue, research hypotheses for 97 companies over a 7-year period from 2012 to 2018 were tested using multivariate regression models. For this purpose, leverage based on book value and leverage based on market value have been used as a representative of financial leverage.



Results: The results show that there is a negative and significant relationship between social responsibility and financial leverage (book leverage and market leverage) of companies.



Conclusion: Social responsibility is one of the factors affecting the capital structure of companies. In other words, companies with higher social responsibility adopt lower leverage ratios.