Response to the Discussion of “Does the Cost of Borrowing Increase for Firms that are Socially and Environmentally Irresponsible?”
研究了企业不负责任的社会、环境与治理活动如何影响债务成本，发现这类活动会提高借款成本，且在腐败程度较低的国家更显著，但罪恶行业与非罪恶行业无显著差异。
Our study aimed to examine the relationship between irresponsible social, environmental, and governance (IESG) activities and the cost of debt (CoD), focusing on three main aspects. First, we explored the direct relationship between IESG practices and the CoD to understand the financial repercussions for firms engaged in these activities. Second, we assessed how country-level characteristics, measured by the corruption perception index (CPI), moderate the relationship between IESG practices and the CoD, shedding light on the influence of national governance contexts. Finally, we investigated whether operating in traditionally “sinful” industries impacts the association between IESG practices and the CoD, exploring whether industry-specific norms and public perceptions of these industries exacerbate these impacts. Our sample consists of 50,281 firm-year observations for non-financial listed firms across 44 countries, spanning the period from 2002 to 2022. Pooled regression, with clustered standard errors at the firm level and a two-stage instrumental variable method, was employed. We find that firms engaging in IESG practices incur a higher CoD. Notably, this effect is more pronounced in countries with lower levels of corruption. Further analysis focused on the impact within sinful industries — such as tobacco, alcohol, and gambling — revealed no significant differences in the CoD associated with IESG practices compared to non-sinful industries. The study offers valuable insights for lending institutions, firms, and credit rating agencies about the financial implications of irresponsible corporate practices.