 The ESG effect on the cost of debt financing: A sharp RD analysisGimede Gigante and Davide Manglaviti International Review of Financial Analysis, 2022, vol. 84, issue C Abstract: Environmental, social, and governance (ESG) factors have become increasingly relevant within the financial world. Despite extensive evidence regarding the equity side, limited studies in the literature have investigated the potential effects of ESG performance on the main drivers of debt. This study aims to understand whether there is a positive effect from a cost of debt standpoint for corporations with relatively better ESG performance. Using the ESG score by Refinitiv and a sharp regression discontinuity design, we do not find statistically significant evidence for discrete jumps in correspondence with the ESG score average for the cost of debt of European nonfinancial corporates over the 2018–2020 period. In a sharp regression discontinuity setting, we obtain analogous results by developing a linear probability model. Keywords: Corporate social performance; Cost of debt; CSR; ESG; Governance; Green bond; Leverage; Linear probability model; Sharp regression discontinuity; Sustainable finance (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:finana:v:84:y:2022:i:c:s1057521922003325 DOI: 10.1016/j.irfa.2022.102382 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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