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The impact of short-term debt for long-term investment on corporate ESG performance

Author

Listed:
  • Tang, Long
  • Hu, Jin
  • Stauvermann, Peter J.
  • Xiong, Ziyi

Abstract

Improving corporate social responsibility performance by optimizing financial behavior is of great significance for promoting sustainable development. This paper utilizes panel data of Chinese listed companies from 2011 to 2023 to investigate the impact and underlying mechanisms of short-term debt for long-term investment (STD-LTI) on corporate ESG performance. The study finds that for each one standard deviation increase in the degree of short-term borrowing for long-term investment by a company, its ESG score will significantly decrease by approximately 0.0390.. The main function channels include increasing credit rents, inhibiting the development of supply chain finance, and reducing environmental investments. Moreover, the effects vary significantly depending on enterprise ownership, managerial myopia level, and the intensity of external supervision. This paper provides insights for fostering government-bank-enterprise cooperation, optimizing corporate financing strategies, and enhancing social responsibility practices.

Suggested Citation

  • Tang, Long & Hu, Jin & Stauvermann, Peter J. & Xiong, Ziyi, 2026. "The impact of short-term debt for long-term investment on corporate ESG performance," Finance Research Letters, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:finlet:v:91:y:2026:i:c:s1544612325027084
    DOI: 10.1016/j.frl.2025.109459
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