Impact of ESG Disclosure Quality on Corporate Cost of Debt: Moderating Role of Innovation Capability in Chinese A-Share Companies

Xinyan Yuan ()
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Xinyan Yuan: Hefei Normal University, School of Economics and Management

A chapter in Proceedings of the 2025 7th International Conference on Economic Management and Cultural Industry (ICEMCI 2025), 2025, pp 354-365 from Springer

Abstract: Abstract With the global sustainable development concept deepening, Environmental, Social, and Governance (ESG) disclosure information has become an important tool for companies to transmit non-financial information and reduce cost of debt. Taking Chinese A-share listed companies in Shanghai, Shenzhen, and Beijing from 2011 to 2023 as samples, this article explores the impact and mechanism of ESG disclosure quality on corporate cost of debt based on Information Asymmetry Theory and Signaling Theory. The article finds that the improvement of ESG disclosure quality significantly reduces corporate cost of debt, and this effect is more prominent in non-state-owned enterprises. Hence, further research indicates that corporate innovation capability weakens the mitigating effect of ESG disclosure on corporate cost of debt financing. This article extends the research on ESG economic consequences from the perspectives of firm heterogeneity and dynamic capabilities, providing a theoretical basis for policymakers to improve ESG disclosure frameworks and to optimize their information disclosure strategies for firms.

Keywords: ESG Disclosure; Cost of Debt; Innovation Capability; Enterprise Nature (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-888-2_35

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DOI: 10.2991/978-94-6463-888-2_35

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