GCG and ESG Theory
GCG and ESG Theory
GCG and ESG Theory
1051/e3sconf/202123501054
NETID 2020
Abstract—Since the reform and opening up, China's economy has developed rapidly, the market economy is
booming, and the financing demand of enterprises is also increasing year by year. As a new development
concept, environmental, social and corporate governance (ESG) theory has become an important evaluation
index for the future development of enterprises. How to achieve sustainable development has become a
necessary challenge for enterprise financing. Based on ESG theory, this paper discusses the influence of
corporate governance performance on financing cost, and studies the relationship between corporate
governance performance and financing cost. Through the empirical analysis, this paper can draw a
conclusion that good corporate governance performance can effectively reduce the financing cost.
According to this conclusion, this paper puts forward some suggestions on corporate governance based on
ESG rating system.
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E3S Web of Conferences 235, 01054 (2021) https://doi.org/10.1051/e3sconf/202123501054
NETID 2020
CGD
Control Score of corporate governance After substituting various variables and data into formula
variable information disclosure
(1), the static model estimation results in Table Ⅱ are
Control obtained.
RTA Return on total assets
variable
Control TABLE II. STATIC MODEL ESTIMATION RESULTS
RNA Return on net assets
variable
Variables FI TQ
Control
CR Current ratio
variable Related variables of corporate governance performance
Control ENV 0.172*** (0.04) 0.005 (0.03)
QR Quick ratio
variable
SOC 0.009 (0.04) -0.007 (0.02)
Control
NPGR 3-year net profit growth rate COP 0.048 (0.18) 0.210** (0.11)
variable
Control ENV×EID -0.008* (0.00) -0.003 (0.00)
AT Asset turnover
variable
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E3S Web of Conferences 235, 01054 (2021) https://doi.org/10.1051/e3sconf/202123501054
NETID 2020
SOC×SRD -0.0004 (0.00) -0.0002 (0.00) LTA -0.424 (0.04) -0.533*** (0.05)
COP×CGD -0.003 (0.01) -0.005* (0.00) BLR 0.099** (0.04) -0.609*** (0.04)
Control variable Lagged period
of dependent 1 period 1 period
Constant variable
13.680*** (1.99) 10.440*** (0.89)
term
*, **, *** indicate significant at the 10%, 5%, and 1% levels,
RTA 0.010 (0.02) 0.007 (0.01) respectively
RNA -0.009 (0.01) -0.002 (0.01) The results support the conclusion of formula (1),
CR -0.160 (0.12) 0.130** (0.05)
indicating that there is a positive relationship between the
performance of formula governance and financing cost,
QR 0.580** (0.14) -0.040 (0.06) and the impact of corporate governance performance on
NPGR 0.00001 (0.00) 0.0002*** (0.00) financing cost is more obvious than environmental and
AT 0.340* (0.18) 0.023 (0.007) social value. On the one hand, this situation shows that
there is an obvious relationship between corporate
LTA -0.590 (0.08) -0.440*** (0.04)
governance performance and financing costs and whether
BLR 0.380*** (0.05) 0.26*** (0.02) enterprises can achieve sustainable development; on the
*, **, *** indicate significant at the 10%, 5%, and 1% levels, other hand, with the continuous promotion of ecological
respectively civilization construction, financial institutions are paying
more and more attention to environmental punishment and
D. Robustness Check social value of enterprises.
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E3S Web of Conferences 235, 01054 (2021) https://doi.org/10.1051/e3sconf/202123501054
NETID 2020
Conference on Communication Systems, Networks and Management and Model Engineering (ICEMME), Malacca,
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Costs," 2019 International Conference on Economic