Research On The Impact Of Corporate Environmental Responsibility On Debt Financing Cost

In 2020,the goal of 2030 ’ carbon peak ’ and 2060 ’ carbon neutrality ’ proposed by General Secretary Xi Jinping at the United Nations summit not only pointed out the direction for the future growth and development of Chinese enterprises,but also indicated that substantial carbon reduction and environmental protection would become the core meaning of China ’ s future development,which puts forward new requirements for the development of listed companies to pay attention to green environmental protection and undertake social environmental responsibility.In enterprises,capital is the lifeline of enterprise development,and its sources are mostly dependent on external financing.The external financing means of Chinese enterprises include debt financing and equity financing.Compared with equity financing,debt financing is not only rich and diverse,but also does not affect the control of entrepreneurs over enterprises,and can quickly accumulate capital for enterprises.It is the first choice for most enterprises to finance,which adopted by most enterprises at present.Therefore,reducing the cost of corporate debt financing is an eternally important problem faced by enterprises.Under the background of green development,undertaking environmental responsibility can undoubtedly establish a good corporate image,increase social resources,and thus reduce the cost of debt financing.Based on these reasons,this paper analyzed the relationship and mechanism between corporate environmental responsibility and corporate debt financing cost through empirical research methods to provides reliable empirical evidence for promoting Chinese enterprises to improve the level of environmental responsibility and reduce the cost of debt financing.This paper uses the environmental responsibility data and financial data of all A-share listed companies from 2010 to 2019 and uses the two-way fixed effect model to explore the impact of corporate environmental responsibility on debt financing costs and analyzes its mechanism.The study found that there was a significant negative correlation between corporate environmental responsibility and debt financing cost,which showed that listed companies can establish the reputation of enterprises in the investment market by complying with the call of national green policy and paying attention to their own environmental responsibility,so as to attract investors ’ attention,so that the majority of investors thought that it was a company worthy of investment.At the same time,it could also improve their level of satisfaction with bank credit requirements,making it easier to obtain bank credit,and thus reduce the cost of corporate debt financing.Further heterogeneity analysis showed that the negative impact of corporate environmental responsibility on corporate debt financing costs was significantly different among enterprises with different property rights.The negative impact of corporate environmental responsibility on debt financing costs was more obvious in state-owned enterprises,but this relationship was not obvious in non-state-owned enterprises.There are three probable reasons.Firstly,The natural political background of state-owned enterprises made them have more advantages in financing and easier access to investor recognition trust.Secondly,based on the different levels of regional economic development,the data were grouped and regressed.It was found that in the economically developed eastern region,the negative correlation between corporate environmental responsibility and debt financing cost was more obvious,while in the economically underdeveloped central and western regions,this relationship was not obvious,which indicated the low level of regional economic development would weaken the reduction effect of environmental responsibility on debt financing cost.Finally,based on the different sizes of enterprises,the sample groups were regressed.It was found that in large-scale enterprises,the negative correlation between corporate environmental responsibility and debt financing cost was more obvious,while in small-scale enterprises,this relationship was not obvious.Therefore,small-scale enterprises would weaken the reduction effect of corporate environmental responsibility on debt financing cost.The mediating effect test found that media attention played a transmission role between corporate environmental responsibility and debt financing cost,which indicated that corporate environmental responsibility can attract media attention and increase the coverage of enterprises,thereby reducing the information asymmetry between enterprises and stakeholders,and the debt financing cost of enterprises.Based on the above research results,this paper puts forward the following suggestions for enterprises,media and government.Enterprises should recognize the importance of environmental protection,actively act,and dynamically strengthen environmental protection measures;The media is supposed to play a good environmental governance outside the law supervision function,objective and fair reporting.The government should play a supervisory and guiding role,strengthen top-level design and screening,and rationally allocate resources.The research in this paper could help promote enterprises to take the initiative to assume environmental responsibility and green development,and also provide reference for the government to solve the problems of high financing costs of enterprises.