| With the rise of the concept of green development in China,the impact of environmental pollution and the fulfillment of social responsibility by enterprises have become the direction of continuous concern of all sectors of society,based on which the ESG investment concept has gradually come into the sight of relevant investors.As an important indicator of green sustainability,the main purpose of ESG is to emphasize that while pursuing profits,companies should also take into account the interests of all stakeholders in the company,such as paying attention to environmental protection and actively fulfilling social responsibility.Therefore,this paper discusses the impact of ESG performance on the cost of equity financing and its internal mechanism from the perspective of equity financing cost,which is important for enterprises to pay attention to ESG concept,improve their ESG performance and promote sustainable development.This paper discusses the impact of ESG performance on the cost of equity financing and its underlying mechanism from the perspective of this issue.In this paper,we choose the data of 472 listed companies in A-shares in China from 2018-2021 as the sample,and use Shang Dao Rong Green ESG rating as the explanatory variable,equity financing cost as the explanatory variable,financing constraint as the mediating variable,as well as selected corporate size,profitability,growth,Tobin’s Q,equity structure,and cash ratio as the control variables,and use the fixed-effects model based on the relevant theory to Empirical design and research.In exploring the impact of ESG performance on equity financing cost,the mediating variable of financing constraint is added to explore the transmission effect of ESG performance on equity financing cost,and secondly,the total sample is further divided into state-owned enterprises and non-state-owned enterprises,and heavily polluting enterprises and lightly polluting enterprises,and the impact of ESG performance on equity financing cost is examined by comparing different samples.The impact of ESG performance on the cost of equity financing is examined.It is found that(1)corporate ESG performance has a significant negative effect on equity financing cost,and corporate ESG performance can reduce equity financing cost;(2)financing constraints play a partly mediating role in the effect of corporate ESG performance on equity financing cost,i.e.,corporate ESG performance will alleviate financing constraints and thus reduce equity financing cost;(3)in the heterogeneity analysis,in terms of corporate nature(3)In the heterogeneity analysis,by firm nature,non-state-owned firms reduce equity financing costs when they improve ESG performance,while there is no correlation between the two for state-owned firms.In terms of industry,light polluters have significantly lower equity financing costs when they improve their ESG performance than heavier polluters.Based on the above findings,this paper makes the following recommendations for enterprises,government,rating agencies and investors: for enterprises,they should pay attention to the development of three dimensions of ESG performance,from environmental protection,active social responsibility and improving corporate governance,one of which is indispensable,and if one of them is neglected,ESG performance-related problems will occur and the enterprise will fall into crisis.For the government,it should strengthen ESG-related construction,improve ESG-related systems,unify the quality and standards of ESG disclosure,and ensure that ESG information disclosed by enterprises is true and reliable,so that investors can incorporate ESG into their investment decisions as early as possible.For rating agencies,they should further improve the rating system by taking into account their current advantages,expand the coverage of rating,and output high-quality rating reports as early as possible.For investors,they should comply with market changes,understand relevant national policies and change their investment philosophy. |
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