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Firm ESG reputation risk and debt choice

Research output: Contribution to journal › Article › peer-review

Standard Standard

Firm ESG reputation risk and debt choice. / Newton, David; Ongena, Steven; Xie, Ru et al.
In: European Financial Management, 08.11.2023.

Research output: Contribution to journal › Article › peer-review

HarvardHarvard

Newton, D, Ongena, S, Xie, R & Zhao, B 2023, 'Firm ESG reputation risk and debt choice', European Financial Management. https://doi.org/10.1111/eufm.12468

APA

Newton, D., Ongena, S., Xie, R., & Zhao, B. (2023). Firm ESG reputation risk and debt choice. European Financial Management. Advance online publication. https://doi.org/10.1111/eufm.12468

CBE

Newton D, Ongena S, Xie R, Zhao B. 2023. Firm ESG reputation risk and debt choice. European Financial Management. https://doi.org/10.1111/eufm.12468

MLA

Newton, David et al. "Firm ESG reputation risk and debt choice". European Financial Management. 2023. https://doi.org/10.1111/eufm.12468

VancouverVancouver

Newton D, Ongena S, Xie R, Zhao B. Firm ESG reputation risk and debt choice. European Financial Management. 2023 Nov 8. Epub 2023 Nov 8. doi: 10.1111/eufm.12468

Author

Newton, David ; Ongena, Steven ; Xie, Ru et al. / Firm ESG reputation risk and debt choice. In: European Financial Management. 2023.

RIS

TY - JOUR

T1 - Firm ESG reputation risk and debt choice

AU - Newton, David

AU - Ongena, Steven

AU - Xie, Ru

AU - Zhao, Binru

PY - 2023/11/8

Y1 - 2023/11/8

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

U2 - 10.1111/eufm.12468

DO - 10.1111/eufm.12468

M3 - Article

JO - European Financial Management

JF - European Financial Management

SN - 1354-7798

ER -