Arbeitspapier
The effects of corporate and country sustainability characteristics on the cost of debt: An international investigation
We investigate the relationship between corporate and country sustainability on the cost of bank loans. We look into 470 loan agreements signed between 2005 and 2012 with borrowers based on 28 different countries across the world and operating in all major industries. Our principal findings reveal that country sustainability related to both social and environmental frameworks has a statistically and economically impactful effect on direct financing of economic activity. An increase of one unit in country sustainability scores is associated with an average decrease in the costs of debt by 64 basis points. Our analysis shows that the environmental dimension of a country's institutional framework is approximately two times as impactful as the societal dimension when it comes to determining the cost of corporate loans. On the other hand, we find no conclusive evidence that firm-level sustainability influences the interest rates charged to borrowing firms by banks.
- Language
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Englisch
- Bibliographic citation
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Series: ZEW Discussion Papers ; No. 14-100
- Classification
-
Wirtschaft
Information and Market Efficiency; Event Studies; Insider Trading
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Corporate Culture; Diversity; Social Responsibility
- Subject
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corporate social responsibility
CSR
CSP
sustainability
banking
financial contracts
culture
- Event
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Geistige Schöpfung
- (who)
-
Hoepner, Andreas
Oikonomou, Ioannis
Scholtens, Bert
Schröder, Michael
- Event
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Veröffentlichung
- (who)
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Zentrum für Europäische Wirtschaftsforschung (ZEW)
- (where)
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Mannheim
- (when)
-
2014
- Handle
- URN
-
urn:nbn:de:bsz:180-madoc-373942
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Hoepner, Andreas
- Oikonomou, Ioannis
- Scholtens, Bert
- Schröder, Michael
- Zentrum für Europäische Wirtschaftsforschung (ZEW)
Time of origin
- 2014