Environmental, Social, and Governance (ESG) Profiles, Stock Returns, and Financial Policy: Australian Evidence
This study investigates the independent effects of environmental (E), social (S), corporate governance (G), and the composite ESG ratings on stock returns and corporate financing decisions of the largest stocks in the Australian equity market. Firms with high composite ESG ratings tend to increase t...
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| Veröffentlicht in: | International review of finance 2017-09, Vol.17 (3), p.461-471 |
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| container_end_page | 471 |
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| container_title | International review of finance |
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| creator | Limkriangkrai, Manapon Koh, SzeKee Durand, Robert B. |
| description | This study investigates the independent effects of environmental (E), social (S), corporate governance (G), and the composite ESG ratings on stock returns and corporate financing decisions of the largest stocks in the Australian equity market. Firms with high composite ESG ratings tend to increase their leverage. For the individual ratings, we find different inferences: firms with low E and high G ratings tend to raise less debt. Firms with high G ratings hold less cash, while those with low G ratings have lower dividend payouts. S ratings have no impact on corporate financing decisions. There appears to be no significant difference in risk‐adjusted returns for portfolios based on ESG ratings, effectively indicating that there is no cost of ESG investment. |
| doi_str_mv | 10.1111/irfi.12101 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 1369-412X |
| ispartof | International review of finance, 2017-09, Vol.17 (3), p.461-471 |
| issn | 1369-412X 1468-2443 |
| language | eng |
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| source | Wiley Online Library Journals Frontfile Complete; Business Source Complete |
| subjects | Corporate governance Dividend distributions Economic impact Environmental effects Environmental governance Equity International Investment policy Ratings & rankings Return on investment Securities markets Studies |
| title | Environmental, Social, and Governance (ESG) Profiles, Stock Returns, and Financial Policy: Australian Evidence |
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