IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i15p6238-d393795.html
   My bibliography  Save this article

Green Social Responsibility and Company Financing Cost-Based on Empirical Studies of Listed Companies in China

Author

Listed:
  • Duan Ji

    (School of Accounting, Shandong University of Finance and Economics, Ji’nan 250014, Shandong, China)

  • Yuyu Liu

    (School of Accounting, Shandong University of Finance and Economics, Ji’nan 250014, Shandong, China)

  • Lin Zhang

    (School of Law and Economics, Shandong University of Technology, Zibo 255000, Shandong, China
    School of Law, Fujian Normal University, Fuzhou 350117, Fujian, China)

  • Jingjing An

    (School of Law, Shandong University of Technology, Zibo 255000, Shandong, China)

  • Wenyan Sun

    (Agricultural Bank of China, Qingdao 266000, Shandong, China)

Abstract

Taking Chinese A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2007 to 2018 as research samples, this paper studies the relationship between green corporation social responsibility (CSR) and financing cost of Chinese companies by means of moderating effect and multiple regression analysis. It is found that, for companies, the better the performance of green social responsibility, the lower the financing cost. However, it is also found that for companies with different pollution degrees and natures of property rights, the financing cost reduction effects due to green social responsibility are quite different. Compared with low-polluting companies, the financing cost reduction effect arisen by green CSR will be weakened for high-polluting companies. Compared with private companies, the financing cost reduction effect from green CSR will also be weakened for state-owned companies. To sum up, the research results of this paper show that there is a significant saving effect on financing cost for companies undertaking green CSR, and companies’ characteristics of pollution degree and property right can regulate the impact of green CSR on financing cost. The conclusion of this paper can encourage companies to take green social responsibility actively and reduce the cost of financing.

Suggested Citation

  • Duan Ji & Yuyu Liu & Lin Zhang & Jingjing An & Wenyan Sun, 2020. "Green Social Responsibility and Company Financing Cost-Based on Empirical Studies of Listed Companies in China," Sustainability, MDPI, vol. 12(15), pages 1-16, August.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:15:p:6238-:d:393795
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/15/6238/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/15/6238/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chutatong Charumilind & Raja Kali & Yupana Wiwattanakantang, 2006. "Connected Lending: Thailand before the Financial Crisis," The Journal of Business, University of Chicago Press, vol. 79(1), pages 181-218, January.
    2. Francis A. Longstaff & Sanjay Mithal & Eric Neis, 2005. "Corporate Yield Spreads: Default Risk or Liquidity? New Evidence from the Credit Default Swap Market," Journal of Finance, American Finance Association, vol. 60(5), pages 2213-2253, October.
    3. Evan Gatev & Philip Strahan, 2008. "Liquidity Risk and Syndicate Structure," NBER Working Papers 13802, National Bureau of Economic Research, Inc.
    4. Brandt, Loren & Li, Hongbin, 2003. "Bank discrimination in transition economies: ideology, information, or incentives?," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 387-413, September.
    5. Juhyun Jung & Kathleen Herbohn & Peter Clarkson, 2018. "Carbon Risk, Carbon Risk Awareness and the Cost of Debt Financing," Journal of Business Ethics, Springer, vol. 150(4), pages 1151-1171, July.
    6. Asim Ijaz Khwaja & Atif Mian, 2008. "Tracing the Impact of Bank Liquidity Shocks: Evidence from an Emerging Market," American Economic Review, American Economic Association, vol. 98(4), pages 1413-1442, September.
    7. Claessens, Stijn & Laeven, Luc, 2004. "What Drives Bank Competition? Some International Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(3), pages 563-583, June.
    8. Ji, Qiang & Zhang, Dayong, 2019. "How much does financial development contribute to renewable energy growth and upgrading of energy structure in China?," Energy Policy, Elsevier, vol. 128(C), pages 114-124.
    9. La Rosa, Fabio & Liberatore, Giovanni & Mazzi, Francesco & Terzani, Simone, 2018. "The impact of corporate social performance on the cost of debt and access to debt financing for listed European non-financial firms," European Management Journal, Elsevier, vol. 36(4), pages 519-529.
    10. Saurabh Mishra & Sachin Modi, 2013. "Positive and Negative Corporate Social Responsibility, Financial Leverage, and Idiosyncratic Risk," Journal of Business Ethics, Springer, vol. 117(2), pages 431-448, October.
    11. Di Giuli, Alberta & Kostovetsky, Leonard, 2014. "Are red or blue companies more likely to go green? Politics and corporate social responsibility," Journal of Financial Economics, Elsevier, vol. 111(1), pages 158-180.
    12. Mahfuja Malik, 2015. "Value-Enhancing Capabilities of CSR: A Brief Review of Contemporary Literature," Journal of Business Ethics, Springer, vol. 127(2), pages 419-438, March.
    13. Chollet, Pierre & Sandwidi, Blaise W., 2018. "CSR engagement and financial risk: A virtuous circle? International evidence," Global Finance Journal, Elsevier, vol. 38(C), pages 65-81.
    14. Joseph P. H. Fan & T. J. Wong & Tianyu Zhang, 2014. "Politically Connected CEOs, Corporate Governance, and the Post-IPO Performance of China's Partially Privatized Firms," Journal of Applied Corporate Finance, Morgan Stanley, vol. 26(3), pages 85-95, September.
    15. Long Chen & David A. Lesmond & Jason Wei, 2007. "Corporate Yield Spreads and Bond Liquidity," Journal of Finance, American Finance Association, vol. 62(1), pages 119-149, February.
    16. Sang-Bing Tsai & Min-Fang Chien & Youzhi Xue & Lei Li & Xiaodong Jiang & Quan Chen & Jie Zhou & Lei Wang, 2015. "Using the Fuzzy DEMATEL to Determine Environmental Performance: A Case of Printed Circuit Board Industry in Taiwan," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-18, June.
    17. Pierre Chollet & Blaise Sandwidi, 2018. "CSR engagement and financial risk: A virtuous circle? International evidence," Post-Print hal-02048716, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sun, Jiamu & Xue, Jiaan & Qiu, Xiaodong, 2023. "Has the sustainable energy transition in China's resource-based cities promoted green technology innovation in firms?," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    2. Yaowei Cao & Youtang Zhang & Liu Yang & Rita Yi Man Li & M. James C. Crabbe, 2021. "Green Credit Policy and Maturity Mismatch Risk in Polluting and Non-Polluting Companies," Sustainability, MDPI, vol. 13(7), pages 1-23, March.
    3. Yonghong Tang & Hui Wang & Zirong Lin, 2023. "Spatial Heterogeneity Effects of Green Finance on Absolute and Relative Poverty," Sustainability, MDPI, vol. 15(7), pages 1-22, April.
    4. Wei‐jian Li & Wei Zhu & Bin Wang, 2023. "The impact of creating shared value strategy on corporate sustainable development: From resources perspective," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2362-2384, September.
    5. Seher Uçkun & Aykut Arslan & Serdar Yener, 2020. "Could CSR Practices Increase Employee Affective Commitment via Moral Attentiveness?," Sustainability, MDPI, vol. 12(19), pages 1-17, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hsu, Feng-Jui & Chen, Sheng-Hung, 2021. "US quantitative easing and firm’s default risk: The role of Corporate Social Responsibility (CSR)," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 650-664.
    2. Shakil, Mohammad Hassan, 2021. "Environmental, social and governance performance and financial risk: Moderating role of ESG controversies and board gender diversity," Resources Policy, Elsevier, vol. 72(C).
    3. Li, Wen & Peng, Qing, 2023. "Digital courts and corporate investment in sustainability: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 88(C).
    4. Jagriti Srivastava & Aravind Sampath & Balagopal Gopalakrishnan, 2021. "Is CSR the key to unlocking debt financing during COVID-19? A multicountry perspective," Working papers 481, Indian Institute of Management Kozhikode.
    5. Paola Brighi & Antonio Carlo Francesco Della Bina & Valeria Venturelli, 2022. "Do ESG Investments Mitigate ESG Controversies? Evidence From International Data," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0084, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    6. Farah, Tazrina & Li, Jialong & Li, Zhicheng & Shamsuddin, Abul, 2021. "The non-linear effect of CSR on firms’ systematic risk: International evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 71(C).
    7. Yin Shi & Xiaoni Li & Maher Asal, 2023. "Impact of sustainability on financial distress in the air transport industry: the moderating effect of Asia–Pacific," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-23, December.
    8. Charl de Villiers & Jing Jia & Zhongtian Li, 2022. "Corporate social responsibility: A review of empirical research using Thomson Reuters Asset4 data," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(4), pages 4523-4568, December.
    9. Dunbar, Craig & Li, Zhichuan (Frank) & Shi, Yaqi, 2020. "CEO risk-taking incentives and corporate social responsibility," Journal of Corporate Finance, Elsevier, vol. 64(C).
    10. Naumer, Hans-Jörg & Yurtoglu, Burcin, 2022. "It is not only what you say, but how you say it: ESG, corporate news, and the impact on CDS spreads," Global Finance Journal, Elsevier, vol. 52(C).
    11. Zhu, Danyu & Gao, Xin & Luo, Zijun & Xu, Weidong, 2022. "Environmental performance and corporate risk-taking: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    12. Thi‐Hong‐Van Hoang & Wojciech Przychodzen & Justyna Przychodzen & Elysé A. Segbotangni, 2020. "Does it pay to be green? A disaggregated analysis of U.S. firms with green patents," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1331-1361, March.
    13. Ai, Li & Gao, Lucia S., 2023. "Firm-level risk of climate change: Evidence from climate disasters," Global Finance Journal, Elsevier, vol. 55(C).
    14. Doga Izcan & Eralp Bektas, 2022. "The Relationship between ESG Scores and Firm-Specific Risk of Eurozone Banks," Sustainability, MDPI, vol. 14(14), pages 1-21, July.
    15. Ayton, Julie & Krasnikova, Natalia & Malki, Issam, 2022. "Corporate social performance and financial risk: Further empirical evidence using higher frequency data," International Review of Financial Analysis, Elsevier, vol. 80(C).
    16. Lutfi Abdul Razak & Mansor H. Ibrahim & Adam Ng, 2020. "Which Sustainability Dimensions Affect Credit Risk? Evidence from Corporate and Country-Level Measures," JRFM, MDPI, vol. 13(12), pages 1-22, December.
    17. Dion Bongaerts & K. J. Martijn Cremers & William N. Goetzmann, 2012. "Tiebreaker: Certification and Multiple Credit Ratings," Journal of Finance, American Finance Association, vol. 67(1), pages 113-152, February.
    18. Xuanjuan Chen & Jing-Zhi Huang & Zhenzhen Sun & Tong Yao & Tong Yu, 2020. "Liquidity Premium in the Eye of the Beholder: An Analysis of the Clientele Effect in the Corporate Bond Market," Management Science, INFORMS, vol. 66(2), pages 932-957, February.
    19. Corò, Filippo & Dufour, Alfonso & Varotto, Simone, 2013. "Credit and liquidity components of corporate CDS spreads," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5511-5525.
    20. Champagne, Claudia & Coggins, Frank & Sodjahin, Amos, 2022. "Can extra-financial ratings serve as an indicator of ESG risk?," Global Finance Journal, Elsevier, vol. 54(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:15:p:6238-:d:393795. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.