 The Role of Environment Social and Governance (ESG) Score To Cost of Debt: Evidence From ASEAN Countries*Moch. Doddy Ariefianto, Fitriani Rahmansyah, Valencia Wijaya and Viary Audreane International Journal of Finance & Economics, 2025, vol. 30, issue 3, 3031-3043 Abstract: Environmental social governance (ESG) disclosure has become an increasingly important component in determining a company's financing cost (cost of debt‐CoD). This phenomenon could be attributed to company reputation development and the rise of socially responsible investing. We contribute to the existing literature by investigating further the causality process of ESG scores to the reduction of CoD particularly in nonfinancial companies in one of the most dynamic world regions: Association of Southeast Asian Nations (ASEAN). To meet our research objective; we applied difference‐in‐difference analysis to a dataset of 135 nonfinancial companies (that published ESG score in Bloomberg) from 6 ASEAN countries, using annual frequency data from 2012 to 2021 (1350 observations). We found that ESG does reduce CoD in the range of 21.3% (measured by interest expense) to 27.7% (measured by credit spread). Our finding is quite solid under an array of robustness checks. Date: 2025 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wly:ijfiec:v:30:y:2025:i:3:p:3031-3043 Ordering information: This journal article can be ordered from Access Statistics for this article International Journal of Finance & Economics is currently edited by Mark P. Taylor, Keith Cuthbertson and Michael P. Dooley More articles in International Journal of Finance & Economics from John Wiley & Sons, Ltd. |
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