ESG Disclosure and Cost of Equity: Do Big 4 Audit Firms Matter?

Nidhin Mathath, Vinod Kumar and G. Balasubramanian

Journal of Emerging Market Finance, 2025, vol. 24, issue 1, 87-108

Abstract: Efficiency in the financial market helps firms and the economy through efficient capital allocation and improved capital productivity. ESG (environmental, social, and governance) disclosure provides nonfinancial information that reduces informational inefficiency in the financial market. India saw a major shift in ESG regulation in 2013–2014. This study examines the impact of ESG disclosure on the cost of equity after new regulation. Analyzing panel data from 586 firms (2015–2022), the key findings are: (a) superior ESG disclosure lowers the cost of equity mainly due to the governance component of ESG; (b) the presence of Big 4 auditors do not have a significant differential impact on the ESG-cost of equity relationship. JEL Codes: G30, M14, Q56

Keywords: Sustainability; information asymmetry; cost of capital; audit quality (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/09726527241280017 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:emffin:v:24:y:2025:i:1:p:87-108

DOI: 10.1177/09726527241280017

Access Statistics for this article

More articles in Journal of Emerging Market Finance from Institute for Financial Management and Research
Bibliographic data for series maintained by SAGE Publications ().