Corporate Environmental Credit And Equity Capital Cost

Focusing on solving environmental pollution problems,The "Nineteenth National Congress" report proposed “improve environmental credit evaluation system”.China began to explore corporate environmental credit evaluation work in 2005,aiming at solving the problem of information opacity of corporate environmental protection behavior.At present,only some provinces have carried out environmental credit evaluation.In order to clarify the significance and policy effect of the environmental credit evaluation system and improve the enthusiasm of provinces and cities in conducting environmental credit evaluation,This paper takes the sample of A-share listed companies that have been included in the corporate environmental credit evaluation from 2012 to 2017,examines the relationship between environmental credits and the cost of equity capital.The results show that:(1)environmental credit is negatively correlated with the cost of equity capital.That is,the higher the environmental credit of the enterprise,the lower the cost of equity capital.(2)The degree of information asymmetry plays a role in regulating the relationship between environmental credit and equity capital cost.In companies with a high degree of information asymmetry,the effect of environmental credit on the cost of equity capital is greater.(3)Environmental credit mainly affects the cost of equity capital by affecting business risks.Companies with low environmental credit ratings have significantly increased their business risks,resulting in an increase in the cost of equity capital.