 ESG performance and loan contracting in an emerging marketKun Qian, Bingjie Shi, Yunling Song and Hao Wu Pacific-Basin Finance Journal, 2023, vol. 78, issue C Abstract: In this paper, we find that better environmental, social and governmental (ESG) performance is associated with a greater magnitude of bank loans, a lower probability of collateral requirements and a lower cost of bank loans in China. The relation is mainly driven by social and governmental factors while the environmental factor plays an insignificant role. Our main findings are robust to a battery of sensitivity tests, including alternative measures of ESG performance and bank-loan contracting, as well as different approaches to address potential endogeneity. Additional analysis indicates that reduced risk and increased information environment might be channels by which ESG performance affects bank-loan contracting while state ownership and the COVID-19 outbreak moderate that impact. Overall, this paper reveals that in emerging markets, the dimensional ESG factors have heterogeneous impacts on loan contracting which should be considered carefully to promote the high-quality development of ESG. Keywords: ESG; Loan contracting; Reduced risk channel; Information environment; COVID-19 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:78:y:2023:i:c:s0927538x23000392 DOI: 10.1016/j.pacfin.2023.101973 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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