Is ESG the key to unlock debt financing during the COVID-19 pandemic? International evidence

Jagriti Srivastava, Aravind Sampath and Balagopal Gopalakrishnan

Finance Research Letters, 2022, vol. 49, issue C

Abstract: In this article, we examine whether stakeholder engagement impacts firms’ ability to raise debt during the COVID-19 pandemic. Using firm-level data from 51 countries, we find that firms with greater stakeholder engagement obtain higher debt financing during the COVID-19 pandemic. This effect is more pronounced for riskier firms, highlighting the importance of maintaining relationships with stakeholders. Moreover, we find that stakeholder engagement facilitates higher debt financing for less asset-intensive firms and firms in emerging economies. Our empirical analysis reinforces the role of firms’ stakeholder engagement in mitigating the adverse impact of economic shocks.

Keywords: CSR; ESG; Stakeholder; COVID-19; Debt financing (search for similar items in EconPapers)
JEL-codes: G01 G21 G32 H12 M14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003488

DOI: 10.1016/j.frl.2022.103125

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