ESG performance, investors’ heterogeneous beliefs, and cost of equity capital in China

Tang, Hua

doi:10.3389/fenvs.2022.992559

Cited by 20 publications

(6 citation statements)

References 54 publications

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“…As in research methodology adopted by Tang [57], the ESG rating and its segmented ratings constructed by the mainstream domestic ESG rating agency Huazheng Index Information Service and obtained from the Information Financial Terminal of Wind are used in this study to measure the ESG of the enterprise and are logarithmically processed. The ESG evaluation system of the Huazheng Index Information Service draws on overseas ESG development experience and is also adapted to China's current situation.…”

Section: Esgmentioning

confidence: 99%

ESG, Cultural Distance and Corporate Profitability: Evidence from Chinese Multinationals

Liu

2023

Sustainability

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In recent years, the demand for social responsibility arising from sustainable development has led to the gradual formation of a global consensus on the concept of environmental, social and governance (ESG), which has a wide impact on corporate operations. Based on legitimacy theory, this study examines the impact of ESG on corporate profitability. In addition, it explores the effectiveness of cultural distance as a moderator in the relationship between ESG and corporate profitability. Using fixed effects and moderated effects models, this study analyses panel data of Chinese manufacturing multinationals from 2014 to 2021. The results show that ESG significantly and positively affects corporate profitability and that the impact of ESG on corporate profitability is significantly and positively moderated by cultural distance. The research results are expected to provide meaningful insights into the importance of ESG and the factors to be considered by firms in their cross-border investment decision making.

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Section: Esgmentioning

confidence: 99%

ESG, Cultural Distance and Corporate Profitability: Evidence from Chinese Multinationals

Liu

2023

Sustainability

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“…Secondly, corporate ESG performance can reduce the cost of debt financing and equity financing by reducing the information asymmetry with creditors and equity holders. Raimo et al (2021) [3] and Tang (2022) [4] found that the higher the transparency of ESG information disclosure, the lower the cost of debt financing. Finally, corporate ESG performance can comprehensively improve financial performance and market value by easing financing constraints.…”

Section: Literature Reviewmentioning

confidence: 99%

ESG and green Innovation

Wang

2024

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In recent years, with the growing emphasis on environmental protection and sustainable development in society, comprehensive green transformation has emerged as a prominent trend in economic and social development. This transformation not only enables enterprises to achieve sustainable development but also captivates the attention of an increasing number of investors. By analyzing the panel data of listed companies between 2011 and 2021, we found that outstanding ESG performance plays a pivotal role in promoting green technology innovation among enterprises. Within this process, financing constraints serve as a crucial intermediary. This research outcome offers valuable references for promoting green development initiatives among enterprises, enhancing the disclosure system of social responsibility information, and optimizing the efficiency of capital market allocation..

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“…With developing, ESG is increasingly valued by enterprises. Tang [14] believes that enterprises with better ESG performance can not only reduce the cost of debt financing, but also alleviate investors' expected risks, thereby reducing the cost of equity capital.…”

Section: Introductionmentioning

confidence: 99%

ESG and Leverage Adjustment: Based on Stakeholder Theory and Signaling Theory

Chen

2024

AEMPS

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Many of today's firms are suffering from leverage imbalance. A company's debt can negatively impact its performance when it deviates from its target leverage. Thus, this paper discusses adjusting the firm's capital structure to an optimal one. Combining stakeholder theory and signaling theory, this paper discusses how and under what circumstances ESG may have an impact on capital structure, from which the paper proposes the following conjectures: whether ESG can have a significant impact on a firm's target leverage; how ESG can affect a firm's capital structure when the firm has an asymmetry of information; and whether ESG can be tailored to economic environments that can have an impact on a firm's capital structure changes have an effect. After the inference of this paper, ESG can effectively influence firms' capital structure and accelerate the adjustment speed of firms' leverage to target leverage under the state of firms' information transparency. ESG will be more effective in regulating firms' target leverage in the downturn of the economic environment. The analytical framework of this paper may also be effectively applied to other research directions, such as corporate investment decisions, cash holdings, and dividend policies.

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ESG performance, investors’ heterogeneous beliefs, and cost of equity capital in China

Cited by 20 publications

References 54 publications

ESG, Cultural Distance and Corporate Profitability: Evidence from Chinese Multinationals

ESG, Cultural Distance and Corporate Profitability: Evidence from Chinese Multinationals

ESG and green Innovation

ESG and Leverage Adjustment: Based on Stakeholder Theory and Signaling Theory

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