The Effect of Environmental, Social, and Governance Performance Factors on Firms’ Cost of Debt: International Evidence

Muhammad Nurul Houqe · Kamran Ahmed · Grant Richardson

61 citations0/0 files storedThe International Journal of Accounting

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Social Responsibility Reporting Corporate Finance and Governance Credit Risk and Financial Regulations

Abstract

This study examines the effect of environmental, social, and governance (ESG) performance on firms’ cost of debt (COD). Based on a sample of 18,950 firm-year observations from 41 countries over the period of 2008–2015, we find a significant negative association between aggregate ESG performance and firms’ COD. We also observe a significant negative association between the individual ESG performance factors (E, S, and G) and firms’ COD. In addition, the negative association between aggregate/individual ESG performance and firms’ COD is economically significant, ranging from 16.93% to 21.20% of median COD values. Finally, disclosure of ESG performance, stakeholder orientation, investor protection, control of corruption, and social progress have pronounced effects on the negative association between ESG performance and firms’ COD. Taken together, our results suggest that ESG performance has a significant negative effect on firms’ COD from an international perspective.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 61 citations exist upstream.

References

1998Law and Finance 2008Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches 1997Legal Determinants of External Finance 1995Corruption and Growth 1997THE CORPORATE SOCIAL PERFORMANCE-FINANCIAL PERFORMANCE LINK 1980Financial Ratios and the Probabilistic Prediction of Bankruptcy 1988Agency Costs, Net Worth, And Business Fluctuations 2010Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting

Cited by

2022Environmental, social, and governance performance, national cultural values and corporate financing strategy 2024ESG Scores and Performance in Brazilian Public Companies 2024Do corporate carbon emissions affect risk and capital costs?2024ESG performance and cost of debt 2024The relationship between ESG, financial performance, and cost of debt: the role of independent assurance 2025Finance for a Greener future: Evolving the financial sector for ESG and sustainable corporate debt management

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.