Research on the Relationship Between Corporate Governance Performance and Financing Cost Under the Background of ESG Theory

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.

Application of an Environmental, Social and Governance (ESG) Course to Enhance the Knowledge of Sustainable Finance of International Chinese College Students in Thailand

“…Some academics have found that high ESG scores are associated with a highly competitive advantage based on the use of 3,966 companyyear observations of 661 companies listed on the Bursa Malaysia from 2012 to 2017 (Mohammad & Wasiuzzaman, 2021). The ESG theory suggests that companies need to integrate environmental, social and corporate governance into their development philosophy in order to achieve long-term stability ( Wang & Zhang, 2020).…”