Firm ESG reputation risk and debt choice

David Newton; Steven Ongena; Ru Xie; Binru Zhao

doi:10.1111/eufm.12468

Firm ESG reputation risk and debt choice

David Newton
, Steven Ongena
, Ru Xie
, Binru Zhao

Ysgol Busnes Albert Gubay

University of Bath
University of Zurich

Allbwn ymchwil: Cyfraniad at gyfnodolyn › Erthygl › adolygiad gan gymheiriaid

167 Wedi eu Llwytho i Lawr (Pure)

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Using 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.

Iaith wreiddiol	Saesneg
Cyfnodolyn	European Financial Management
Dyddiad ar-lein cynnar	8 Tach 2023
Dynodwyr Gwrthrych Digidol (DOIs)	https://doi.org/10.1111/eufm.12468
Statws	E-gyhoeddi cyn argraffu - 8 Tach 2023

Mynediad at Ddogfen

10.1111/eufm.12468Trwydded: CC BY

Euro Fin Management - 2023 - Newton - Firm ESG reputation risk and debt choiceFersiwn derfynol wedi’i chyhoeddi, 1.17 MBTrwydded: CC BY

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abstract = "Using 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.",

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AU - Ongena, Steven

AU - Xie, Ru

AU - Zhao, Binru

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N2 - Using 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.

AB - Using 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.

KW - capital structure

KW - debt choices

KW - debt structure

KW - ESG reputation risk

KW - information asymmetry

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Firm ESG reputation risk and debt choice

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