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สถาบันวิจัยเศรษฐกิจป๋วย อึ๊งภากรณ์
Puey Ungphakorn
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Call for Papers: PIER Research Workshop 2025
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Discussion Paperdp
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Year
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31 March 2020
20201585612800000
No. 129

ESG and Creditworthiness: Two Contrary Evidence from Major Asian Markets

Abstract

Assets managed under sustainable investment criteria have been massively growing during the recent years. Among the criteria, environmental, social and governance (ESG) score leads the group as an important indicator of non-financial quality of a firm, which may reflect value to investors either through higher expected profit or lower risk. In this paper, we focus on the latter by exploring whether ESG score has any impact on the credit rating of firms due to the risk mitigation effect. Ordered logistic regressions were applied on a panel dataset of listed companies in Shanghai and Tokyo Stock Exchanges over 2009–2018. The results suggest that only in Japan, having ESG coverage is greatly associated with being awarded higher credit rating. However, just the environmental and governance pillars positively affect the Japanese firms' credit ratings, while the social pillar shows negative effect.

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JEL: G30G32G34M14Q51
Tags: esgissuer credit ratingordered logitchinajapan
The views expressed in this workshop do not necessarily reflect the views of the Puey Ungphakorn Institute for Economic Research or the Bank of Thailand.
Natthawat Jamprasert
Natthawat Jamprasert
Chulalongkorn University
Pornpitchaya Kuwalairat
Pornpitchaya Kuwalairat
Chulalongkorn University
Narapong Srivisal
Narapong Srivisal
Chulalongkorn Business School
Jananya Sthienchoak
Jananya Sthienchoak
Chulalongkorn University

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