Firm ESG reputation risk and debt choice
Copyright policy )Firm ESG reputation risk and debt choice
AbstractUsing a novel sample covering 3783 US public firms from 2007 to 2020, we examine how negative media coverage of firm‐level environmental, social, and governance (ESG) practices affects a firm's debt choice. We find that firms with higher ESG reputation risk rely more on public bond than bank loan. The social and governance components, in particular, matter. Moreover, firms that receive more negative news coverage display a higher propensity to issue new bonds as opposed to securing new bank debt. Overall, our study presents empirical evidence on the relation between firm ESG reputation risk and debt financing.
- Norwegian University of Science and Technology Norway
- KU Leuven Belgium
- University of Zurich Switzerland
- Swiss Finance Institute Switzerland
- University of Bath United Kingdom
2000 General Economics, Econometrics and Finance, OWNERSHIP, capital structure, information asymmetry, MARKET DISCIPLINE, INVESTMENT, BANK DEBT, 10003 Department of Finance, CORPORATE, Social Sciences, RELIGION, Business & Economics, MANAGEMENT, 3502 Banking, finance and investment, ESG reputation risk, 1402 Accounting, 3501 Accounting, auditing and accountability, COST, 1502 Banking, Finance and Investment, debt choices, PUBLIC DEBT, Business, Finance, 330 Economics, SHAREHOLDER VALUE, debt structure, Finance
2000 General Economics, Econometrics and Finance, OWNERSHIP, capital structure, information asymmetry, MARKET DISCIPLINE, INVESTMENT, BANK DEBT, 10003 Department of Finance, CORPORATE, Social Sciences, RELIGION, Business & Economics, MANAGEMENT, 3502 Banking, finance and investment, ESG reputation risk, 1402 Accounting, 3501 Accounting, auditing and accountability, COST, 1502 Banking, Finance and Investment, debt choices, PUBLIC DEBT, Business, Finance, 330 Economics, SHAREHOLDER VALUE, debt structure, Finance
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