Article
Version 1
This version is not peer-reviewed
Impact of ESG Rating Disagreement on Debt Financing Costs
Version 1
: Received: 12 September 2024 / Approved: 12 September 2024 / Online: 12 September 2024 (16:02:46 CEST)
How to cite: Su, F.; Xue, X. Impact of ESG Rating Disagreement on Debt Financing Costs. Preprints 2024, 2024091001. https://doi.org/10.20944/preprints202409.1001.v1 Su, F.; Xue, X. Impact of ESG Rating Disagreement on Debt Financing Costs. Preprints 2024, 2024091001. https://doi.org/10.20944/preprints202409.1001.v1
Abstract
Using the data of China's A-share non-financial listed enterprises from 2015 to 2022 as a sample, this study empirically tests the impact of ESG rating disagreement on corporate debt financing cost. The results show that ESG rating disagreement significantly increases the debt financing costs of enterprises, and this result still holds after a series of robustness tests such as replacing the dependent and independent variables and PSM approach. Meanwhile, the heterogeneity analysis reveals that non-state-owned enterprises and enterprises in non-heavily polluting industries are more sensitive to ESG ratings disagreement. In addition, mechanism analysis shows that corporate financing constraints mediate the relationship between ESG rating disagreements and debt financing costs. The findings of this study provide important evidence for understanding the impact of ESG rating disagreement on the costs of debt financing, enrich the meaning of ESG rating disagreement, and reveal the significance of unifying ESG rating standards.
Keywords
ESG; ESG rating disagreement; Debt financing costs; Mechanism analysis
Subject
Social Sciences, Other
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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