Corporate ESG Disclosure Level,Executive Compensation And Debt Financing Cost

Under the background of promoting the green and low-carbon transformation of economic and social development and realizing the "dual carbon" goal as scheduled,building a green financial system and reducing debt financing costs have become one of the frontier topics for listed companies to enhance their long-term competitiveness.Emissions of greenhouse gases,global warming and other issues caused public attention to reducing carbon,reduce carbon,and as in all aspects of the environmental and social carrying capacity has reached almost load limit,carbon reaches the peak,carbon neutral "double carbon" goal,as well as the thought of sustainable development in different economic levels,different cultural background of countries around the world get consensus and common recognition.In terms of theory,ESG concept(environment,society and governance concept)adapted to contemporary economic and social development has been gradually formed after summarizing the "dual carbon" goal and values of sustainable development.At present,existing domestic and foreign studies on the economic consequences of ESG information disclosure mainly focus on the impact of environmental information disclosure on the cost of capital and corporate performance,while few studies focus on the impact of ESG information disclosure on the cost of debt financing,and the research results of different scholars are inconsistent.This triggers the following thinking: Based on China’s national conditions and Chinese market,what impact does ESG’s disclosure level have on debt financing cost? Further,what is the impact of information disclosure level of ESG’s three subdivision dimensions on debt financing cost? What are the mechanisms by which these effects are realized? What role does executive compensation play in the relationship between the two? What are the differences in the impact of ESG disclosure level on debt financing cost of enterprises of different industry nature? Is there a time lag in the impact of ESG disclosure level on debt financing cost? All the above questions are urgent to be answered by Chinese enterprises at present to realize sustainable development.To answer these questions,this paper takes the data of Domestic A-share listed companies from 2011 to 2020 as research samples and constructs A dynamic panel regression model(SYS-GMM model)to explore the relationship between ESG disclosure level and debt financing cost,as well as the restraining or promoting effect of executive compensation on this relationship.Firstly,the relevant concepts involved in this paper and domestic and foreign literature on ESG research process are summarized.Secondly,based on China’s current national conditions,relevant hypotheses are proposed according to stakeholder theory,legitimacy theory,asset pricing theory,principal-agent theory and system theory.Then,the sy S-GMM model is used to empirically test the debt financing cost of China’s A-share listed companies as the explained variable,the ESG information disclosure level score and the environmental,social and governance information disclosure level score in Bloomberg database as the core explanatory variables,and the executive compensation as the moderator variable.On the basis of the above,the possible influence of different industry heterogeneity on the research question is further analyzed,and the lag effect of ESG disclosure level on debt financing cost is discussed.This paper draws the following conclusions :(1)disclosure levels of ESG,S(social)and G(governance)are significantly positively correlated with debt financing costs.This basically confirms the hypothesis about "green cleaning",and some stakeholders believe that the disclosure of INFORMATION about ESG is a waste of resources.(2)E(environment)information disclosure level presents a ∩ type relationship with the debt financing cost,which is different from the relationship between the other three variables on the debt financing cost,indicating that the state has the largest intensity in corporate environmental regulation.Item(3)with the introduction of pay by inspection regulation of executive compensation for the main regression effect,found that executive pay of ESG,S(social),G(governance)disclosure level and cost of debt financing have positive correlation relationship between inhibition,and the E(environment)disclosure level and the studying type relationship between the cost of debt financing have inhibition effect,It confirms the trend of linking ESG performance with executive performance in the capital market,and the setting of executive compensation will indeed change the agency conflict between enterprises and creditors through certain mechanism of action.(4)The robustness of baseline regression was verified by changing the measurement method of explained variables.(5)Propensity score matching(PSM)method was used to exclude the endogeneity problem of sample self-selection,again confirming the results of baseline regression.(6)By distinguishing whether the sample enterprises belong to the heavy pollution industry,it is proved that compared with the heavy pollution industry enterprises,the positive correlation between the ESG disclosure level and debt financing cost of the non-heavy pollution industry enterprises is more significant.(7)The time-lag effect of ESG information disclosure level on debt financing cost is further analyzed.The regression results show that ESG information disclosure can play a role in reducing debt financing cost in the long run.Through the study of A-share enterprises as samples,this paper finds that in the DOMESTIC ESG ecosystem,neither the policy makers nor the enterprises that comply with relevant regulations to disclose ESG information nor the stakeholders who hold different opinions on the disclosure of ESG information have A deep understanding of the importance of ESG concept.Therefore,at the end of the paper,it is suggested that all parties should abandon the short-sighted behavior of attaching importance to immediate economic benefits,balance long-term value growth,take into account the relationship between financial indicators and social benefits,construct a new development pattern,adhere to the concept of sustainable development in the long term,and provide support for high-quality economic development.