Research on the impact of enterprise ESG performance on debt financing cost

Abstract

Based on the sample of Shanghai and Shenzhen A-share listed companies from 2015 to 2020,this paper studies the impact of enterprise ESG performance on debt financing cost and its mechanism, the results show that enterprise ESG performance can significantly reduce the cost of debt financing. Among them, corporate social performance and corporate governance performance are negatively correlated with debt financing costs, while the positive correlation between corporate environmental performance and debt financing costs is not obvious. At the same time, it is found that ESG performance can reduce the cost of debt financing by alleviating the information risk within the enterprise and increasing the attention of external institutional investors, and further studies have found that the mitigation effect of ESG performance on debt financing cost is more prominent in high audit quality, eastern regions and non-state enterprises. Therefore, enterprises should pay attention to ESG performance in operation management, actively establish enterprise ESG performance management mechanism, take the initiative to assume the responsibility of ESG information disclosure, and promote the sustainable development of enterprises.