| Author: | King, Yuk Shun Augusto |
| Title: | The impact of ESG performance on credit rating and capital structure, and how it alleviate financial constraints |
| Advisors: | Tong, Wilson (AF) |
| Degree: | D.B.A. |
| Year: | 2022 |
| Subject: | Social responsibility of business Corporations -- Finance Credit ratings Hong Kong Polytechnic University -- Dissertations |
| Department: | Faculty of Business |
| Pages: | 100 pages : color illustrations |
| Language: | English |
| Abstract: | Environmental, Social, Governance (ESG) becomes an increasingly important topic in today’s business community and the academic world. In this thesis, I aim to contribute to this line of study by investigating how the ESG Performance of a company would impact on its credit rating and capital structure. I found that both ESG Disclosure and ESG Rating are positively correlated with credit rating. A company that has good ESG Disclosure and strong ESG Rating will have a good credit rating. I also found that good ESG Disclosure and strong ESG Rating are good proxies of conservative corporate risk management and there is a negative relationship between these ESG components on leverage, thus cater for capital structure considerations. Finally, ESG Disclosure do not have an impact on financial constraint whereas good ESG Rating can help to alleviate a company’s financial constraint by the reduction of cost of borrowing. My study hence bears important practical implications. Banks and investors should incorporate ESG Performance in their credit assessments and to use ESG Performance to help them understand the use of leverage in a company. Furthermore, companies should focus on the improvement of their ESG Rating in order to benefit from the reduction in their cost of borrowing. |
| Rights: | All rights reserved |
| Access: | restricted access |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| 6742.pdf | For All Users (off-campus access for PolyU Staff & Students only) | 2.08 MB | Adobe PDF | View/Open |
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