ESG Performance and Cost of Debt in Chinese A-Share Firms with Dual Rating Evidence and Ownership Heterogeneity

Linxu Ying ()
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Linxu Ying: Capital University of Economics and Business, School of Economics

A chapter in Proceedings of the 2026 11th International Conference on Social Sciences and Economic Development (ICSSED 2026), 2026, pp 683-693 from Springer

Abstract: Abstract Environmental, Social, and Governance (ESG) performance, as a core indicator of corporate sustainability, has increasingly been integrated into debt pricing mechanisms. This study uses 2015–2024 data on A‑share listed companies in Shanghai, Shenzhen, and Beijing and employs dual ESG ratings from Huazheng and SynTao Green Finance to examine the effect of corporate ESG performance on cost of debt and the moderating role of cash holdings. The results indicate that ESG performance is significantly negatively associated with cost of debt, and this effect is concentrated among non‑state‑owned firms. Moreover, higher cash holdings attenuate the marginal benefit of ESG in lowering financing costs, suggesting that cash reserves and ESG reputational capital may serve as substitutes in reducing expected default losses. The findings offer quantifiable empirical guidance for regulators to design differentiated green disclosure requirements, for non‑state‑owned firms to develop mechanisms linking ESG performance to interest savings, and for growth firms to consider reputational commitments as partial substitutes for certain financial solidity thresholds.

Keywords: ESG Performance; Cost of Debt; Cash Holdings; State Ownership; Panel Regression (search for similar items in EconPapers)
Date: 2026
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DOI: 10.2991/978-94-6239-701-9_70

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