Environmental performance, debt financing cost and firm value : a case study of listed companies in heavily polluting industries

Abstract

As the public becomes more and more sensitive to environmental pollution, they will pay more attention to the environmental protection of enterprises. The high level of environmental performance of enterprises means that enterprises will pay more energy and resources. Simultaneously, stable and sustainable capital supply is an important guarantee for enterprises to obtain sustainable development in market competition; moreover, debt financing cost becomes crucial for enterprises. Lower debt financing cost refers to that enterprises can spend more money for business development and improve the value of enterprises. This research studies the relationship between corporate environmental performance, debt financing cost and corporate value through the data of listed companies in heavily polluting industries from 2011 to 2021. Firstly, the research is designed by using the document research method combined with stakeholder theory, signaling theory, principal-agent theory and other relevant theories; besides, empirical research is conducted through descriptive statistics, correlation analysis and multiple linear regression model. Through the research, this paper draws the following conclusions: the environmental performance of listed companies in heavily polluting industries has a significant negative correlation with debt financing costs; environmental performance significantly promotes enterprise value; the cost of debt financing has a significant positive correlation with enterprise value; debt financing cost has intermediary effect on the relationship between environmental performance and enterprise value