Existing studies generally recognize the critical role played by macro monetary policy, of which the uncertainty will increase corporate bond issuance premiums at a micro level. However, relatively little is known about these relationships from the perspective of non-nancial information in corporation. So this study set out to do further exploration. We use the database to obtain information, including the bond issuance of A-share listed corporations in China during 2015 to 2020. The ndings suggest that high environmental, social, and governance (ESG) ratings from listed corporations signi cantly weaken the positive correlation between monetary policy uncertainty and bond issuance premiums. Speci cally, it has a positive information pricing effect on China's primary debt issuance market, as well as a mitigating impact on macro nancial policy risk. We also nd, through further mechanistic studies, that ESG ratings are more helpful in undermining the impact of monetary policy uncertainty on bond issuance premiums in the context of higher nancial information quality. Our ndings are conducive to enriching the research framework of the economic consequences of ESG ratings, meaningfully in uencing the growing literature that exposed the mechanism of bond issuance premiums, and further, verifying the interaction of information at different levels (macro vs micro) in asset pricing.
The negative impact of the financialization of non-financial firms cannot be ignored in China. However, existing studies neglect that the government environmental governance is an important influential factor in corporate investment decisions. Using a sample of China’s non-financial listed firms from 2007 to 2020, we examine the impact of local governments’ energy-saving target constraints on the financialization of local firms in terms of whether local governments set numerically specific energy-saving targets in the Government Work Reports. The main findings of this paper are as follows. First, local governments setting clear energy-saving targets inhibit local firms’ financialization and the result holds even after a series of robustness tests. Second, the negative association between local governments’ energy-saving target constraints and firm financialization is more pronounced among firms in eastern regions and green provinces. Third, the quality of firm information disclosure and local environmental public supervision enhance the inhibiting effect of local governments’ energy-saving target constraints on firm financialization. Fourth, local governments’ energy-saving target constraints restrain firm financialization by attracting more external analyst coverage and encouraging internal technological innovation. Moreover, this inhibiting effect can help reduce overinvestment and improve the total factor productivity of firms. Our study provides evidence supporting firm financialization studies from the novel perspective of government environmental governance.
Existing studies generally recognize the critical role played by macro monetary policy, of which the uncertainty will increase corporate bond issuance premiums at a micro level. However, relatively little is known about these relationships from the perspective of non-financial information in corporation. So this study set out to do further exploration. We use the database to obtain information, including the bond issuance of A-share listed corporations in China during 2015 to 2020. The findings suggest that high environmental, social, and governance (ESG) ratings from listed corporations significantly weaken the positive correlation between monetary policy uncertainty and bond issuance premiums. Specifically, it has a positive information pricing effect on China's primary debt issuance market, as well as a mitigating impact on macro financial policy risk. We also find, through further mechanistic studies, that ESG ratings are more helpful in undermining the impact of monetary policy uncertainty on bond issuance premiums in the context of higher financial information quality. Our findings are conducive to enriching the research framework of the economic consequences of ESG ratings, meaningfully influencing the growing literature that exposed the mechanism of bond issuance premiums, and further, verifying the interaction of information at different levels (macro vs micro) in asset pricing.
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