Research on the Impact of ESG Disclosure on Corporate Cost of Debt

Wen Lin ()
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Wen Lin: Wuhan University of Technology

A chapter in Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026), 2026, pp 498-505 from Springer

Abstract: Abstract Using a sample of A-share listed firms in China, this study examines the impact of ESG disclosure on the corporate cost of debt and explores the underlying mechanism. Baseline regression results show that ESG disclosure significantly reduces firms’ cost of debt. This finding remains robust after a series of tests, including adding additional control variables, employing lagged independent variables, and using an instrumental-variable approach. Channel Analyses suggest that ESG disclosure lowers the cost of debt primarily by mitigating corporate financing constraints. Heterogeneity analyses further show that the negative association between ESG disclosure and the cost of debt is more pronounced among non-state-owned enterprises and firms with lower levels of excessive leverage. Overall, this study provides empirical evidence from the debt capital market on the economic consequences of ESG disclosure and offers meaningful implications for promoting high-quality corporate development.

Keywords: Cost of debt; ESG disclosure; Financing constraints (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-642-5_48

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DOI: 10.2991/978-94-6239-642-5_48

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