Media ESG sentiment and the cost of debt: Evidence from China

This study investigates how media ESG sentiment affects corporate cost of debt. Existing literature primarily focuses on firms’ own ESG performance and disclosure, with limited attention to the role of media ESG coverage in corporate financing. Using data from Chinese A-share listed companies covering 2007–2022, we develop a theoretical model and empirically examine this relationship. We find that positive media ESG sentiment significantly reduces corporate cost of debt by 3.76% for a one-standard-deviation increase. Our analysis reveals that media sentiment operates through three distinct channels: reducing information asymmetry, enhancing investor confidence, and facilitating support from policy-oriented banks. Cross-sectionally, the effect is more pronounced for firms with lower social reputation, higher ESG rating dispersion, inadequate ESG disclosure, smaller size and non-SOEs. These findings offer new insights into how external information intermediaries shape sustainable finance markets and provide implications for improving ESG information systems in emerging economies.