1. Introduction
Researchers have been searching for the optimal capital structure of enterprises for many years.
The optimal capital structure was first proposed by Modigliani and Miller [1] in The Cost of Capital, Corporation Finance, and the Theory of Investment. Usually, the optimal capital structure refers to a capital structure that can minimize the weighted average cost of capital of a company, maximize its value, and maximize the enthusiasm of all stakeholders. The optimal capital structure of a company is the ratio when the marginal cost and marginal return of debt capital are equal, in other words, the core is finding the point of optimal debt. Jensen and Meckling [2] argue that a firm reaches an optimal capital structure when the reduced agency cost of equity from debt financing is precisely equal to the agency cost of debt. However, according to Mokhovaa and Zinecker [3] , while firms can manage internal factors and their effects, managers have no control over macroeconomic factors. Both determinants have a significant impact on the firm's capital structure. So, it is difficult to determine an optimal capital structure applicable to all types of enterprises, and only a basic optimization state can be described.
For this reason, many companies have excessive debt or insufficient leverage ratios nowadays. The excessive debt of enterprises is manifested in the following aspects: the income obtained can not guarantee the payment of interest; the current ratio and quick ratio are far below the standard; and the poor ability to repay long-term debts. Specifically, excessive debt reduces the company's revenue; it could lead to financial risks related to payment, expenditure, and cash, affecting its operational performance. Pindado, Requejo and Rivera [4] are of the opinion that the decrease in revenues is associated with a monetary policy that is overly lenient. Such a policy may result in higher inflation in the future, putting the profitability of highly leveraged companies at risk and causing them to encounter issues with refinancing and continuing as a going concern. In extreme cases, this may even lead to business failure. Lv, Wang and Li [5] argue that overcapacity in the industry may cause excessive debt for a company by reducing its income. Other reasons may be blind expansion of the enterprise, forming ineffective assets, and reducing the overall operational efficiency of the enterprise. The enterprise has agency issues, Overconfidence, and insufficient managers' abilities.
A low level of debt may prevent a company from fully utilizing its financial leverage to achieve higher returns. Because there is a negative correlation between profitability and debt level, meaning that companies with stronger profitability should have higher debt levels than companies with lower profitability. Therefore, Barton and Gordon [6] believe that a low level of debt reduces the firm's profitability. The studies of Nishihara and Shibata [7] suggest that higher leverage mitigates losses from information asymmetry. Heng [8] shows that the combined effects of information asymmetry, agency problems, and transaction costs lead to differences in the cost of financing between insider and outsider firms, thus creating constraints on corporate debt financing. Therefore, insufficient debt may prevent companies from diversifying or reducing risks through debt. Due to information asymmetry, the company's assets are mainly concentrated in the hands of shareholders, and if financial risks occur, they may suffer more losses. The reason for insufficient debt may be the impact of financing constraints, which may be caused by the following situations: Xiang, et al. [9] indicate that due to asymmetric corporate information, each investor does not have complete information about the company's current production and operations, leading to increased uncertainty and risk, whereas Song and Chen [10] argue that uncertainty and the degree of information asymmetry have the opposite effect on investment, it leads to an increase in the risk premium required by investors, Wang, Tu, Li and Song [11] believe that increasing the cost of corporate finance and enhancing the financing constraint, lowering the cost of finance, and optimizing the channels and quality of external finance can effectively regulate the financing constraint. In addition, issues such as agency costs may also lead to increased financing constraints.
Environmental, Social, and Governance(ESG) is an important standard for evaluating enterprises. According to Ratajczak and Mikolajewicz [12] , it can affect the long-term performance and Shakil [13] argues that the firms that perform reasonably on ESG have lower total risk, is also a key factor in achieving sustainable development. With developing, ESG is increasingly valued by enterprises. Tang [14] believes that enterprises with better ESG performance can not only reduce the cost of debt financing, but also alleviate investors' expected risks, thereby reducing the cost of equity capital.
Through sorting and inference, this paper demonstrates that ESG factors can influence the target leverage of companies, aiding in adjusting their optimal capital structure. Different factors, however, influence the pace at which ESG impacts a company's target leverage. From the standpoint of information asymmetry, the paper reveals that as corporate information becomes increasingly transparent, the rate at which ESG factors adjust corporate target leverage accelerates. Additionally, this rate and its effectiveness are influenced by the prevailing market environment. The research infers that in deteriorating market conditions or during economic downturns, ESG factors expedite the adjustment of a company's leverage towards its target.
If ESG factors impact the capital structure and the speed of adjustment to target leverage, the theoretical framework of this paper would be validated once the inference is demonstrated. Given that changes in capital structure arise from a firm's financing decisions, the research framework of this paper might also be relevant to the study of other aspects related to financing decisions, such as the firm's cash holdings, investment choices, and dividend policy.
2. Literature Review
After analyzing and referring to prior literature, this paper has identified some key factors that influence capital structure. From the perspective of business operations, several elements come into play. Firstly, there's information asymmetry. According to the pecking order theory of Myers and Majluf [15] , firms might prioritize internal financing, such as retained earnings, subsequently, they would opt for debt financing due to its relatively lower cost, and finally, they would consider equity financing [16,17] . However, the presence of information asymmetry can result in stricter conditions for enterprises seeking financing [18] . This can lead to a higher proportion of corporate debt financing [19,20] , imposing greater financing constraints on corporations [21] . Consequently, this increases the cost of capital [22,23] . As a result, corporate financing might not always align with the pecking order theory, leading to shifts in the capital structure.
The second factor is surplus management, which can be achieved by increasing the profit in the financial report for the purpose of financing. Surplus management may have a positive impact on corporate leverage [24] . Firstly, according to signaling theory proposed by Spence [25], surplus management manipulates the profit in the financial report to increase it [26] , thereby signaling high profits to attract more investment from investors [27] . This can meet the enterprise's demand for equity financing. On the other hand, the increase in the profit portion of the financial report results in higher corporate income tax. To offset the costs associated with this tax increase, the enterprise needs to increase debt financing and apply debt tax barriers [28,29,30] . This, in turn, leads to a change in the capital structure.
The third factor is agency problems, which may result in an increase in agency costs according to the trade-off theory due to potential conflicts of interest between shareholders and creditors [31, 32,33,34]. Agency problems can also lead to conflicts of interest between shareholders and corporate management [35,36], the existence of which may be related to the two elements mentioned above. The presence of information asymmetry between shareholders and management levels may make it challenging for shareholders to assess management's decisions [37]. This can lead the firm to opt for sacrificing free cash flow in favor of higher debt levels to limit management's decisions[38]. However, higher debt levels can result in over-indebtedness for the firm, restricting its sources of funding. On one hand, this could cause the firm to miss out on beneficial investment opportunities or impact investment in product research and development [39,40,41]. On the other hand, it may compel the firm to sell key assets to meet short-term debt requirements, potentially jeopardizing shareholders' interests and affecting the company's capital structure[42]. Conflicts of interest between shareholders and management can also lead to management prioritizing its own interests at the expense of the company's interests, such as through surplus management[43,44], thereby affecting the firm's financing structure.
From a market perspective, this paper also incorporates several elements. The first is monetary policy [4] . Under loose monetary policy, firms experience a decrease in short-term and long-term interest rates [45] , resulting in lower borrowing costs. This may incline firms towards debt financing [46,47,48] . Loose monetary policy also stimulates economic activities for firms, potentially leading to increased investments and, consequently, a greater need for financing [49] . Conversely, a tight monetary policy reduces investment activity [50] and may raise the cost of debt financing due to higher interest rates [45] . This could cause firms to rely more on equity financing or reduce their financial leverage. Another factor is the market environment, where firms tend to secure more financing during economic booms[51] . However, they may exercise caution in fundraising during recessions due to heightened economic uncertainty [52, 53] , thus influencing their capital structure decisions.
3. Theory
From the previous section, we understand that financial leverage can vary based on several factors. A significant factor is the agency problem, which may involve stakeholders such as shareholders, creditors, business managers, customers, suppliers, and others. According to stakeholder theory, business decisions should be made in the interests of all stakeholders or within their constraints [54]. To address this:Firstly, enhancing communication and transparency is vital. Continuous communication between management and stakeholders can increase business transparency [55] , making it easier for shareholders and other stakeholders to monitor management's actions, it indirectly reduces agency costs[56]. Secondly, building trust requires a comprehensive assessment. Managers should evaluate the impact of their decisions on all stakeholders and consider the broader consequences. This will minimize managers making decisions purely for personal benefit [57]. Furthermore, companies should redesign their reward mechanisms to ensure that managerial incentives align with both the company's long-term interests and the interests of all stakeholders [58, 59, 60] . By doing so, the agency problem within the organization can be mitigated.
According to signaling theory, firms in environments with information asymmetry often attract investors, creditors, consumers, or other stakeholders by sending signals [61, 62]. These signals can include the disclosure of financial reports, certified partnerships, and the like. When a firm is concerned not only about its shareholders but also other stakeholders (e.g., employees, customers, community), any positive signals it sends are likely to be perceived as more credible [63] . This enhanced credibility stems from the stakeholder theory, which suggests that management decisions considering all stakeholders tend to be more long-term and sustainable [54, 64, 65,] . Such decisions indicate that the firm is not merely focused on short-term economic gains but also on long-term social and environmental impacts. This, in turn, sends a positive signal to creditors and investors [66].
Good relationships with stakeholders can serve as a form of insurance for enterprises. It provides protection, allowing companies to navigate periods of economic downturn more smoothly. Decision-making that considers the interests of various stakeholders can help mitigate agency problems. By maintaining positive relationships with suppliers, customers, and other stakeholders [67] , companies can spread risks [68] , especially during economic downturns. For instance, stable relationships with multiple suppliers can reduce risks associated with the supply chain [69]. Open and transparent communication with stakeholders enables companies to identify potential problems or risks early on and take preventive measures in a timely manner [70] , leading to more comprehensive and long-term decisions. Additionally, a company that fosters good relationships within the community is more likely to receive support from governments, local communities, and other groups [71]. This support can offer additional resources or a safety net for the enterprise during times of crisis.
ESG (Environmental, Social, and Governance) factors have broadened the scope of stakeholders. With the rise of ESG, companies have begun to prioritize not only shareholders but also other stakeholders like employees, communities, and the environment. These factors are vital for a company's long-term success and sustainability [72, 73, 74]. ESG encourages businesses to evaluate the long-term impact of their activities on society and the environment [75] . Moreover, companies with strong ESG performance tend to be more competitive and adept at risk management. This strong performance can send a positive signal to investors about the company's long-term value and stability [13] . The increasing interest of investors and consumers in ESG issues compels companies to disclose ESG-related information in their annual reports and other public documents, thereby reducing information asymmetry [76, 77, 78]. By incorporating ESG considerations, companies are better equipped to identify and manage potential risks related to environmental, social, and governance issues [79] . In summary, by addressing ESG factors, companies can more effectively solve challenges and enhance their protective measures [74].
4. Discussion
4.1. ESG factors can effectively regulate firms' target leverage
According to stakeholder theory, enterprises must balance the interests of both creditors and shareholders. ESG (Environmental, Social, and Governance) factors can help mediate between these parties, minimizing conflicts of interest. Firstly, strong ESG performance can lower the financing costs for the enterprise. When an enterprise emphasizes ESG factors, both shareholders and creditors are more inclined to engage due to the perceived lower risks and ethical practices, which subsequently reduces financing costs. Secondly, robust ESG performance can enhance the company's ability to sustain its debt, ensuring timely debt repayments and bolstering creditor confidence. This performance can also assure shareholders of the enterprise's long-term value growth, thereby reinforcing their support for management decisions, including capital structure adjustments. Lastly, by prioritizing environmental and social issues, enterprises can mitigate potential legal, reputational, and other risks. This risk reduction eases uncertainties for both shareholders and creditors, enhancing their trust in the enterprise. In these ways, ESG factors help align the interests of shareholders and creditors, paving the way for an optimal capital structure within the enterprise.
4.2. ESG factors accelerate firms' adjustment of target leverage in the presence of information transparency
In an environment with information transparency, a firm's ESG performance is readily apparent to the public. Good ESG performance can enhance the firm's public image and credibility, thereby reducing financing costs and more effectively regulating target leverage. Additionally, information transparency diminishes the information asymmetry between investors and firms. As shown in the following equation:
\( I=(M-N-NESG)/M \) (1)
As ESG emerges and prompts companies to disclose more information, it reduces information asymmetry between firms and investors. This transparency allows investors to more easily assess a company's true value and potential risks, facilitating faster adjustments to a company's capital structure. Firms with high information transparency often have higher ESG scores. These companies might be favored by investors since high ESG scores typically indicate lower risk and promising long-term prospects. As a result, these companies attract more investments, leading to increased capital inflows. Such inflows can help firms adjust to their target leverage more swiftly. Moreover, as government regulators enforce stricter requirements on firms' ESG practices, these firms may find it necessary to adjust their leverage more rapidly to meet these standards, indirectly accelerating the rate at which ESG factors drive adjustments to target leverage.
4.3. In the event of a downturn, ESG factors cause firms to adjust their leverage to target leverage more quickly
ESG serves a function akin to insurance, and just as "insurance" carries fixed expenses, so does ESG when acting in this insurance-like capacity. These fixed expenses can elevate a company's costs. Even when economic conditions are stable and favorable, and the insurance function of ESG isn't activated, these fixed costs remain. According to the NPV evaluation method, investors typically focus on how a company can enhance its net present value (NPV). Due to the existence of ESG expenses, the formula is shown below:
\( PG=f(k)-k-kESG \gt 0 \) (2)
When ESG expenses result in a decrease in NPV, investors may become resistant to ESG factors. During periods of stable market conditions or economic upturns, this resistance from investors can hinder the rate at which ESG influences a firm's target leverage. However, in the event of a downturn in the economy, when corporate capital inflows are restricted, the NPV is shown below:
\( PB=-k-kESG \) (3)
Since ESG has an insurance-like function, when the economy goes down, the insurance function is triggered and the ESG gives the company an additional benefit, the formula of which is shown below:
\( PB=-k-kESG+f(ESG) \gt 0 \) (4)
In this case, as the ESG benefits increase the net present value of the enterprise, then it will make investors pay more attention to ESG investment, and adjust the enterprise’s capital structure through ESG factors, is that the enterprise can be adjusted to its target leverage more quickly. Thus, the optimal capital structure is achieved.
5. Conclusion
Each stakeholder in an enterprise exerts significant influence because the enterprise must consider their interests and continuously engage in communication with them. This enhances the transparency of the company's information, addresses issues like information asymmetry, and sends positive signals, thereby reducing the company's costs. Beyond agency costs, these include the enterprise's financing costs. When financing costs decrease (whether through equity or debt financing), the financing choices of enterprises shift, influencing their capital structures. Previous research has shown that there exists an optimal capital structure for an enterprise. This optimal structure aims to balance the interests of all stakeholders.
The paper examines whether ESG can address the aforementioned issues. Due to the unique nature of ESG, its associated factors are particularly favored by stakeholders. As a result, enterprises should not only prioritize the interests of traditional stakeholders like shareholders, management, and creditors but also focus on corporate social responsibility and environmental impacts. Enhancing ESG performance not only reduces enterprise risks but also sends out positive signals. Moreover, the protective role of ESG can have profound implications for the long-term development of the enterprise.
Article establishes a theoretical framework and discussions, addressing the pertinent issues through three main facets. First, ESG factors can effectively guide a firm's target leverage, enabling them to attain an optimal capital structure. Moreover, in the context of information transparency, ESG factors expedite a firm's adjustment pace towards their target leverage, facilitating quicker optimization of their leverage. Lastly, considering the influence of the economic environment, it can be deduced that ESG factors enable firms to adjust their leverage more swiftly towards the target leverage during economic downturns.
This paper also elucidates the influence of ESG factors on a firm's capital structure, which stems from the firm's financing decisions. ESG performance often sways these financing decisions, and a firm's ESG information is pivotal to these choices [80]. This is because financing decisions can considerably alter a firm's cash holdings based on the source and magnitude of financing [81] . Furthermore, these decisions can influence the investment strategies of enterprises through the methods of financing, associated costs, and potential financing constraints [82] . Additionally, through these financing decisions and their subsequent impact on cash holdings and investment decisions, the firm's dividend policy can be affected (as evidenced in studies like "Influence of Investment Fund on Stock Dividend Policy") [83,84,85]. Therefore, the theoretical framework presented in this paper might also be relevant to studies focused on cash holdings, investment decisions, dividend policies, and other related enterprise directions, paving the way for future research.
References
[1]. Franco, M., and Merton, H. M. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
[2]. Michael, C. J., and William, H. M. (1976). Theory of the Firm Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3, 305-360.
[3]. Natalia, M., and Marek, Z. (2014). Macroeconomic Factors and Corporate Capital Structure. Procedia - Social and Behavioral Sciences, 110, 530-540.
[4]. Julio, P., Ignacio, R., and Juan, C. R. (2019). Does Money Supply Shape Corporate Capital Structure? International Evidence from a Panel Data Analysis. The European Journal of Finance, 26(6).
[5]. Jing-Ye, L., Ting, W., and Peng-Lin, L. (2018). The Impact of Overcapacity and Surging Imports on the Earnings of Domestic Coal Companies. Journal of Interdisciplinary Mathematics, 21(5).
[6]. Sidney, L. B., and Paul, J. G. (1988). Corporate Strategy and Capital Structure. Strategic Management Journal, 9, 623-632.
[7]. Michi, N., and Takashi, S. (2017). Default and Liquidation Timing under Asymmetric Information. European Journal of Operational Research, 263(1), 321-336.
[8]. Tan, H. (2008). Analysis of Influence of Debt Financing Constraints on Enterprise Investment Behavior Choice. Call of Paper Proceedings of 2008 International Conference on Managment Science and Engineering, 54-58.
[9]. Pengcheng, X., Xiaosen, H., and Liyin, S. (2015). Research on the Phenomenon of Asymmetric Information in Construction Projects-The Case of China. International Journal of Project Management, 33(3), 589-598.
[10]. Wenhe, S., and Shou, C. (2023). Investment Timing and Quantity under Uncertainty and Asymmetric Information. Applied Economics Letters, Latest Articles.
[11]. Xiaodong, W., Lei, T., Jinglu, L., and Yuegang, S. (2021). An Empirical Analysis of the OFDI Influence on Financing Constraints Based On Listed Companies in China. International Journal of Technology Management (IJTM), 86(2, 3, 4).
[12]. Piotr, R., and Grzegorz, M. (2021). The Impact of Environmental, Social and Corporate Governance Responsibility on the Cost of Short- and Long-Term Debt. Economics and Business Review, 7(2), 74-96.
[13]. Shakil, M. H. (2021). Environmental, Social and Governance Performance and Financial: Risk Moderating Role of ESG Controversies and Board Gender Diversity. Resources Policy, 72.
[14]. Hua, T. (2022). ESG Performance, Investors’ Heterogeneous Beliefs, and Cost of Equity Capital in China. Frontiers in Environmental Science Environmental Economics and Management, 10.
[15]. Stewart, C. M., and Nicholas, S. M. (1984). Corporate Financing and Investment Decisions When Firms Have Information that Investors Do Not Have Information That Investors Do Not Have. Journal of Financial Economics, 13, 187-221.
[16]. Murray, Z. F., and Vidhan, K. G. (2003). Testing the Pecking Order Theory of Capital Structure. Journal of Financial Economics, 67(2), 217-248.
[17]. ]Yumei, F., Chunfeng, W., and Zhenming, F. (2007). Effects of Information Asymmetry on Listed Companies' Debt Financing Evidence from China. 2007 International Conference on Wireless Communications, Networking and Mobile Computing(WiCOM 2007).
[18]. Jephthah, O. O., Emmanuel, S., and Joshua, Y. A. (2023). Debt Financing Information Sharing and Profitability: Evidence from Listed Firms from an Emerging Economy. Journal of African Business, Latest Articles.
[19]. Reining, P. (2015). Information Asymmetry and Capital Structure: Evidence from Regulation FD. Journal of Accounting and Economics, 59(2-3), 143-162.
[20]. Man, D., Viet-Anh, H., Khoi, N. T., Darren, H.and Xuan-Vinh, V. (2021). Does Media Attention Lower Debt Financing? International Evidence. Emerging Markets Finance and Trade, 58(5).
[21]. Yan-xi, L., Chun-yan, Z., Peng, T., and Dong, C. (2006). The Sensitivity between Debt Financing and Internal Cash Flow with Financing Constraints: Evidence from Chinese Stock Market. 2006 International Conference on Management Science and Engineering.
[22]. Xiang, X., Lingyun, S., and Jing, Z. (2015). The Strategic Gaps of Enterprise, Quality of Information and Cost of Debt Financing. Proceedings of the Second International Symposium -Management, Innovation and Development, 135-140.
[23]. Tran, Q. T. (2021). Economic Policy Uncertainty and Cost of Debt Financing International Evidence. The North American Journal of Economics and Finance, 57.
[24]. Yusuf, A., and Ines, K. (2022). Real Earnings Management and Capital Structure: Does Environmental Social and Governance ESG Performance Matter? Cogent Business & Management, 9(1).
[25]. Spence, A. M. (1974). Market Signaling:Informational Transfer in Hiring and Related Screening Processes. Cambridge Mass: Harvard University Press.
[26]. Zhonghai, Y., Sun,Y., and Qianqian, Z. (2013). Management Motivation and Earnings Management Methods. 2013 International Conference on Cyber-Enabled Distributed Computing and Knowledge Discovery.
[27]. Deborah, D. S., and Anita, K. P. (2017). Signaling Versus Free Cash Flow Theory: What Does Earnings Management Reveal About Dividend Initiation? Journal of Accounting, Auditing & Finance, 34(2), 284-308.
[28]. Yingzhao, L., and Min, H. (2010). An Empirical Study of the Impact of Effective Corporate Income Tax Rate on Corporate Debt Financing and Investment Decisions. Conference on Web Based Business Management, 1-2, 1061-1064.
[29]. Li, Y. (2013). Analysis on Debt Financing Comprehensive Effect of Chinese Listed Companies: Based on Relevance between Tax Shield and Financial Leverage. Psychology, Management and Social Science, 15, 211-218.
[30]. Jacques, A. S., and Rashmi, T. (1992). Debt Financing, the Darby Effect, and the Inflation-Induced Penalty in Historical Cost Depreciation. Journal of Accounting and Public Policy, 11(1), 83-92.
[31]. Kerstin, L., Alexander, B., Thomas, K., Sebastian, A. T., and Daniel, B. (2020). The Effect of Institutional Dual Holdings on CSR Performance. Journal of Sustainable Finance & Investment, 12(2), 431-450.
[32]. Christopher, S. A., Wayne, R. G., and Joseph, P. W. (2010). The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting. Journal of Accounting and Economics, 50( 2-3), 179-234.
[33]. Victor, M. G., Francisco, G. (2008). Influence of Bank Concentration and Institutions on Capital Structure New International Evidence. Journal of Corporate Finance, 14(4), 363-375.
[34]. Andrew, B. A. (2017). Optimal Debt and Profitability in the Trade-Off Theory. Journal of Finance, 73(1), 95-143.
[35]. Ebenezer, A. B., and Kingsley, O. A. (2017). The Effects of Board Experience and Independence on Mitigating Agency Conflict. Journal of Accounting in Emerging Economies, 7(4), 445-467.
[36]. Ben, A. C., and Lesage, C. (2013). Financial Auditors Facing Agency Conflicts : an Audit Fees Determinants Study in France. Comptabilite Controle Audit, 19(1), 59-89.
[37]. Ahsan, H., and Haiyan, J. (2012). Managerial Ownership-Induced Income Smoothing and Information Asymmetry. Pacific Accounting Review, 24(2), 211-232.
[38]. Alan, V. S. D. (2001). Capital Structure and the Control of Managerial Incentives. Journal of Corporate Finance, 8, 287-311.
[39]. Yanmin, S. (2023). Does Excessive Debt Affect the Green Technology Innovation: Evidence from China. Environment, Development and Sustainability.
[40]. Cheng‑Few, L., Chengru, H., and Maggie, F. (2020). Differential Risk Effect of Inside Debt, CEO Compensation Diversification, and Firm Investment. Review of Quantitative Finance and Accounting, 56, 505-543.
[41]. Coulibaly, B., and Millar, J. (2011). Investment Dynamics in the Aftermath of the Asian Financial Crisis: A Firm-Level Analysis. International Finance, 14(2), 331-359.
[42]. Alan, V. S. D. (2009). Interactions Between Corporate Agency Conflicts. The Financial Review, 44, 151-178.
[43]. Abderrazak, D. (2008). R&D Diversification in MNCs: Between Earnings Management and Shareholders Increasing Wealth. Journal of Business Economics and Management, 9(3), 99-205.
[44]. Erahtina, O. (2011). Preventive Measures for Dealing With Corporate Conflicts. Proceedings of the 7th European Conference on Management Leadership and Governance, 144-150.
[45]. Gong, G., and Meng, S. (2013). Monetary Policy, Financing Constraints and Corporate Investment. 2013 Third International Conference on Intelligent System Design and Engineering Applications.
[46]. Liangwei, W. (2022). Monetary Policy, Fiscal Policy, and Capital Structure Dynamic Adjustment Evidence from Chinese Listed Companies. Mathematical Problems in Engineering, 12.
[47]. Azofra, V., Rodríguez-Sanz, J. A., Velasco, P. (2020) The Role of Macroeconomic Factors in the Capital Structure of European Firms: How Influential is Bank Debt. International Review of Economics & Finance, 69, 494-514.
[48]. Petr, K., Ray, S. M., and Sel, D. (2021). Effects of Quantitative Easing on Firm Performance in the Euro Area. The North American Journal of Economics and Finance, 57.
[49]. Kajurová, V., and Linnertová, D. (2018). Loose Monetary Policy and Corporate Investment of Manufacturing Firms in the Czech Republic. Review of Economic Perspectives, 18(4), 371-385.
[50]. Xingquan, Y., Liang, H., Wanli, L., Xingqiang, Y., and Lin, T. (2017). Monetary Policy, Cash Holding and Corporate Investment Evidence from China. China Economic Review, 46, 110-122.
[51]. Ying, H., Yuxiu, H., Xuegang, C., Qiang, L., and Yuwen, Z. (2021). CEO Experience and Corporate Financing Decisions: Evidence from a Natural Experiment in China. China Economic Review, 70.
[52]. Lucas, A. D. S., and Flávia, Z. D. (2021). The Relationship Between Economic Policy Uncertainty and Corporate Leverage Evidence from Brazil. Finance Research Letters, 40.
[53]. Chenglin, G., and Takuji, W. T. (2023). Economic Uncertainty and Firms’ Capital Structure Evidence of China. Risks, 11(4), 66.
[54]. Jacob, H., R. Edward, F., and Stefan S. (2014). Applying Stakeholder Theory in Sustainability Management: Links, Similarities, Dissimilarities, and a Conceptual Framework. Organization & Environment, 27 (4), 328-346.
[55]. Thomas, M. J., Jeffrey, S. H., and Will, F. (2018). How Applying Instrumental Stakeholder Theory Can Provide Sustainable Competitive Advantage. Academy of Management Review, 43(3), 371-391.
[56]. Beiting, C., Ioannis, I., and George, S. (2013). Corporate Social Responsibility and Access to Finance. Strategic Management Journal, 35, 1-23.
[57]. James, E. M., Steven, A. H., and Lori, O. (2009). Governance Implications of the Effects of Stakeholder Management on Financial Reporting. The international journal of business in society, 9(3), 271-282.
[58]. Eric, A. F. (2010). CEO Pay Fairness as a Predictor of Stakeholder Management. Journal of Business Research, 63(4), 404-410.
[59]. Huang, Y., Li, J., and Wang, J. (2009). Analysis of the Shortcomings and Improvement of the Independent Director System in China. Proceedings of the 5th International Symposuim For Corporate Governance, Books 1 and 2,1536-1543.
[60]. Lin, R. (2017). Cross-Case Study on the Incentive Mechanism of Co-investment Projects in State Owned Enterprises from the Perspective of Employee Governance. Proceedings of the 2017 3rd International Conference on Economics, Social Science, Arts, Education and Management Engineering (ESSAEME 2017), 119, 231-236.
[61]. Joseph, E. C., and Jeffrey, S. H. (2010). Stakeholder Treatment Amongst IPOs and the Acquisition of Resources for Entrepreneurial Ventures. Journal of Enterprising Culture, 18(1), 29-48.
[62]. William, S., and Ryan, W. B. (2017). Experimental Evidence of Pooling Outcomes Under Information Asymmetry. Management Science, 63(5), 1586-1605.
[63]. Lu, Y., and Xiaohua, T. (2019). Will Corporate Social Responsibility Discourage Inefficient Investment? An Empirical Research based on Chinese Listed Companies. Proceedings of the 5th Annual International Conference on Social Science and Contemporary Humanity Development (SSCHD 2019), 376, 382-387.
[64]. Jacob, H., Stefan, S., and Sarah, E. W., (2015). Linking Sustainability-Related Stakeholder Feedback to Corporate Sustainability Performance: an Empirical Analysis of Stakeholder Dialogues. International Journal of Business Environment, 7(2), 200-218.
[65]. Irene, M. H., Jamal, A. N., and Fereshteh, M. (2015). Stakeholder Relationships, Engagement, and Sustainability Reporting. Journal of Business Ethics, 138, 417-435.
[66]. Dongmin, K., Jia, L., Yanan, W., and Ling, Z. (2023). Employee Stock Ownership Plans and Corporate Environmental Engagement. Journal of Business Ethics.
[67]. Mani, V., Gunasekaran, A., and Delgado, C. (2018). Enhancing Supply Chain Performance Through Supplier Social Sustainability an Emerging Economy Perspective. International Journal of Production Economics, 195, 259-272.
[68]. Zhixue, L., Ronggui, D., Lei, W., Rui, S. and Xinyi, S. (2022). Making Project Risk Response Decisions through Stakeholders' Impact on Project Risk Interaction. Construction Research Congress 2022: Project Management and Delivery, Contracts, and Design and Materials, 794-804.
[69]. Hannes, H., Christian, B., Christoph, B., and Michael, H. (2014). Sustainability-Related Supply Chain Risks: Conceptualization and Management. Business Strategy and the Environment, 23(3), 160-172.
[70]. Andrew, K. S., and Edward, C. T. (2014). Organizational Transparency: A New Perspective on Managing Trust in Organization-Stakeholder Relationships. Journal of Management, 42(7), 1784-1810.
[71]. Fassin, Y. (2011). A Dynamic Perspective in Freeman’s Stakeholder Model. Journal of Business Ethics, 96, 39-49.
[72]. Niccolò, N., Gabriele, S., Nicola, M., and Roberto, Q. (2021). Corporate Controversies and Company's Financial Performance: Exploring the Moderating Role of ESG Practices. Technological Forecasting and Social Change, 162.
[73]. Maretno, H., Indrarini, L., and Robert, L. (2014). Board Diversity and Corporate Social Responsibility. Journal of Business Ethics, 132(4), 641-660.
[74]. Feng, H., Hanyu, D., and Bo, Y. (2022). Corporate ESG Performance and Manager Misconduct: Evidence from China. International Review of Financial Analysis, 82.
[75]. Akrum, H., Rebecca, M., and Ahmed, A. (2023). Investigating the Factors That Determine the ESG Disclosure Practices in Europe. Sustainability, 15(6).
[76]. Benlemlih, M., and Bitar, M. (2016). Corporate Social Responsibility and Investment Efficiency. Journal of Business Ethics, 148, 647-671.
[77]. Jin-Wook, K., and Cheong-Kyu, P. (2022). Can ESG Performance Mitigate Information Asymmetry? Moderating Effect of Assurance Services. Applied Economics, 55(26), 2993-3007.
[78]. Bilyay-Erdogan, S. (2022). Corporate ESG Engagement and Information Asymmetry: the Moderating Role of Country-Level Institutional Differences. Journal of Sustainable Finance & Investment, Latest Articles.
[79]. Chunhua, L., Dianlong, W., and Feng, H. (2023). Corporate ESG Performance and Trade Credit Financing-Evidence From China. International Review of Economics & Finance, 85, 337-351.
[80]. Zahid, R. M. A., Saleem, A., and Maqsood, U. S. (2023). ESG Performance, Capital Financing Decisions, and Audit Quality: Empirical Evidence from Chinese State-Owned Enterprises. Environmental Science and Pollution Research, 30, 44086-44099.
[81]. Haifeng, G., Tenkir, S. L., Jiqiang, T., and Zhen, W. (2020). Financial Leverage and Firm Efficiency: the Mediating Role of Cash Holding. Applied Economics, 53(18).
[82]. May, H., and Jingjing, Y. (2015). The Role of Leverage in Cross-Border Mergers and Acquisitions. International Review of Economics & Finance, 43, 170-199.
[83]. Liu, W. L. (2014). Influence of Investment Fund on Stock Dividend Policy: Evidence from Chinese Listed Firms. Information Science and Management Engineering, 1-3(46), 29-36.
[84]. Dai, B., (2016). Cash Holding, Dividend Policy and Cash Flow Management: Dynamic Interaction Analysis Based on Chinese Listed Companies. 2016 International Conference on Management, Economics and Social Development (ICMESD 2016) , 1131-1136.
[85]. Hariyani, D. S., Ratnawati, T., and Rahmiyati, N. (2021). The Relationship Between Company Value and Good Financial Governance: Empirical Evidence from Indonesia. The Journal of Asian Finance, Economics and Business, 8(7), 447-456.
Cite this article
Chen,H. (2024). ESG and Leverage Adjustment: Based on Stakeholder Theory and Signaling Theory. Advances in Economics, Management and Political Sciences,72,82-91.
Data availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
Disclaimer/Publisher's Note
The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.
About volume
Volume title: Proceedings of the 2nd International Conference on Management Research and Economic Development
© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and
conditions of the Creative Commons Attribution (CC BY) license. Authors who
publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons
Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this
series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published
version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial
publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and
during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See
Open access policy for details).
References
[1]. Franco, M., and Merton, H. M. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
[2]. Michael, C. J., and William, H. M. (1976). Theory of the Firm Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3, 305-360.
[3]. Natalia, M., and Marek, Z. (2014). Macroeconomic Factors and Corporate Capital Structure. Procedia - Social and Behavioral Sciences, 110, 530-540.
[4]. Julio, P., Ignacio, R., and Juan, C. R. (2019). Does Money Supply Shape Corporate Capital Structure? International Evidence from a Panel Data Analysis. The European Journal of Finance, 26(6).
[5]. Jing-Ye, L., Ting, W., and Peng-Lin, L. (2018). The Impact of Overcapacity and Surging Imports on the Earnings of Domestic Coal Companies. Journal of Interdisciplinary Mathematics, 21(5).
[6]. Sidney, L. B., and Paul, J. G. (1988). Corporate Strategy and Capital Structure. Strategic Management Journal, 9, 623-632.
[7]. Michi, N., and Takashi, S. (2017). Default and Liquidation Timing under Asymmetric Information. European Journal of Operational Research, 263(1), 321-336.
[8]. Tan, H. (2008). Analysis of Influence of Debt Financing Constraints on Enterprise Investment Behavior Choice. Call of Paper Proceedings of 2008 International Conference on Managment Science and Engineering, 54-58.
[9]. Pengcheng, X., Xiaosen, H., and Liyin, S. (2015). Research on the Phenomenon of Asymmetric Information in Construction Projects-The Case of China. International Journal of Project Management, 33(3), 589-598.
[10]. Wenhe, S., and Shou, C. (2023). Investment Timing and Quantity under Uncertainty and Asymmetric Information. Applied Economics Letters, Latest Articles.
[11]. Xiaodong, W., Lei, T., Jinglu, L., and Yuegang, S. (2021). An Empirical Analysis of the OFDI Influence on Financing Constraints Based On Listed Companies in China. International Journal of Technology Management (IJTM), 86(2, 3, 4).
[12]. Piotr, R., and Grzegorz, M. (2021). The Impact of Environmental, Social and Corporate Governance Responsibility on the Cost of Short- and Long-Term Debt. Economics and Business Review, 7(2), 74-96.
[13]. Shakil, M. H. (2021). Environmental, Social and Governance Performance and Financial: Risk Moderating Role of ESG Controversies and Board Gender Diversity. Resources Policy, 72.
[14]. Hua, T. (2022). ESG Performance, Investors’ Heterogeneous Beliefs, and Cost of Equity Capital in China. Frontiers in Environmental Science Environmental Economics and Management, 10.
[15]. Stewart, C. M., and Nicholas, S. M. (1984). Corporate Financing and Investment Decisions When Firms Have Information that Investors Do Not Have Information That Investors Do Not Have. Journal of Financial Economics, 13, 187-221.
[16]. Murray, Z. F., and Vidhan, K. G. (2003). Testing the Pecking Order Theory of Capital Structure. Journal of Financial Economics, 67(2), 217-248.
[17]. ]Yumei, F., Chunfeng, W., and Zhenming, F. (2007). Effects of Information Asymmetry on Listed Companies' Debt Financing Evidence from China. 2007 International Conference on Wireless Communications, Networking and Mobile Computing(WiCOM 2007).
[18]. Jephthah, O. O., Emmanuel, S., and Joshua, Y. A. (2023). Debt Financing Information Sharing and Profitability: Evidence from Listed Firms from an Emerging Economy. Journal of African Business, Latest Articles.
[19]. Reining, P. (2015). Information Asymmetry and Capital Structure: Evidence from Regulation FD. Journal of Accounting and Economics, 59(2-3), 143-162.
[20]. Man, D., Viet-Anh, H., Khoi, N. T., Darren, H.and Xuan-Vinh, V. (2021). Does Media Attention Lower Debt Financing? International Evidence. Emerging Markets Finance and Trade, 58(5).
[21]. Yan-xi, L., Chun-yan, Z., Peng, T., and Dong, C. (2006). The Sensitivity between Debt Financing and Internal Cash Flow with Financing Constraints: Evidence from Chinese Stock Market. 2006 International Conference on Management Science and Engineering.
[22]. Xiang, X., Lingyun, S., and Jing, Z. (2015). The Strategic Gaps of Enterprise, Quality of Information and Cost of Debt Financing. Proceedings of the Second International Symposium -Management, Innovation and Development, 135-140.
[23]. Tran, Q. T. (2021). Economic Policy Uncertainty and Cost of Debt Financing International Evidence. The North American Journal of Economics and Finance, 57.
[24]. Yusuf, A., and Ines, K. (2022). Real Earnings Management and Capital Structure: Does Environmental Social and Governance ESG Performance Matter? Cogent Business & Management, 9(1).
[25]. Spence, A. M. (1974). Market Signaling:Informational Transfer in Hiring and Related Screening Processes. Cambridge Mass: Harvard University Press.
[26]. Zhonghai, Y., Sun,Y., and Qianqian, Z. (2013). Management Motivation and Earnings Management Methods. 2013 International Conference on Cyber-Enabled Distributed Computing and Knowledge Discovery.
[27]. Deborah, D. S., and Anita, K. P. (2017). Signaling Versus Free Cash Flow Theory: What Does Earnings Management Reveal About Dividend Initiation? Journal of Accounting, Auditing & Finance, 34(2), 284-308.
[28]. Yingzhao, L., and Min, H. (2010). An Empirical Study of the Impact of Effective Corporate Income Tax Rate on Corporate Debt Financing and Investment Decisions. Conference on Web Based Business Management, 1-2, 1061-1064.
[29]. Li, Y. (2013). Analysis on Debt Financing Comprehensive Effect of Chinese Listed Companies: Based on Relevance between Tax Shield and Financial Leverage. Psychology, Management and Social Science, 15, 211-218.
[30]. Jacques, A. S., and Rashmi, T. (1992). Debt Financing, the Darby Effect, and the Inflation-Induced Penalty in Historical Cost Depreciation. Journal of Accounting and Public Policy, 11(1), 83-92.
[31]. Kerstin, L., Alexander, B., Thomas, K., Sebastian, A. T., and Daniel, B. (2020). The Effect of Institutional Dual Holdings on CSR Performance. Journal of Sustainable Finance & Investment, 12(2), 431-450.
[32]. Christopher, S. A., Wayne, R. G., and Joseph, P. W. (2010). The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting. Journal of Accounting and Economics, 50( 2-3), 179-234.
[33]. Victor, M. G., Francisco, G. (2008). Influence of Bank Concentration and Institutions on Capital Structure New International Evidence. Journal of Corporate Finance, 14(4), 363-375.
[34]. Andrew, B. A. (2017). Optimal Debt and Profitability in the Trade-Off Theory. Journal of Finance, 73(1), 95-143.
[35]. Ebenezer, A. B., and Kingsley, O. A. (2017). The Effects of Board Experience and Independence on Mitigating Agency Conflict. Journal of Accounting in Emerging Economies, 7(4), 445-467.
[36]. Ben, A. C., and Lesage, C. (2013). Financial Auditors Facing Agency Conflicts : an Audit Fees Determinants Study in France. Comptabilite Controle Audit, 19(1), 59-89.
[37]. Ahsan, H., and Haiyan, J. (2012). Managerial Ownership-Induced Income Smoothing and Information Asymmetry. Pacific Accounting Review, 24(2), 211-232.
[38]. Alan, V. S. D. (2001). Capital Structure and the Control of Managerial Incentives. Journal of Corporate Finance, 8, 287-311.
[39]. Yanmin, S. (2023). Does Excessive Debt Affect the Green Technology Innovation: Evidence from China. Environment, Development and Sustainability.
[40]. Cheng‑Few, L., Chengru, H., and Maggie, F. (2020). Differential Risk Effect of Inside Debt, CEO Compensation Diversification, and Firm Investment. Review of Quantitative Finance and Accounting, 56, 505-543.
[41]. Coulibaly, B., and Millar, J. (2011). Investment Dynamics in the Aftermath of the Asian Financial Crisis: A Firm-Level Analysis. International Finance, 14(2), 331-359.
[42]. Alan, V. S. D. (2009). Interactions Between Corporate Agency Conflicts. The Financial Review, 44, 151-178.
[43]. Abderrazak, D. (2008). R&D Diversification in MNCs: Between Earnings Management and Shareholders Increasing Wealth. Journal of Business Economics and Management, 9(3), 99-205.
[44]. Erahtina, O. (2011). Preventive Measures for Dealing With Corporate Conflicts. Proceedings of the 7th European Conference on Management Leadership and Governance, 144-150.
[45]. Gong, G., and Meng, S. (2013). Monetary Policy, Financing Constraints and Corporate Investment. 2013 Third International Conference on Intelligent System Design and Engineering Applications.
[46]. Liangwei, W. (2022). Monetary Policy, Fiscal Policy, and Capital Structure Dynamic Adjustment Evidence from Chinese Listed Companies. Mathematical Problems in Engineering, 12.
[47]. Azofra, V., Rodríguez-Sanz, J. A., Velasco, P. (2020) The Role of Macroeconomic Factors in the Capital Structure of European Firms: How Influential is Bank Debt. International Review of Economics & Finance, 69, 494-514.
[48]. Petr, K., Ray, S. M., and Sel, D. (2021). Effects of Quantitative Easing on Firm Performance in the Euro Area. The North American Journal of Economics and Finance, 57.
[49]. Kajurová, V., and Linnertová, D. (2018). Loose Monetary Policy and Corporate Investment of Manufacturing Firms in the Czech Republic. Review of Economic Perspectives, 18(4), 371-385.
[50]. Xingquan, Y., Liang, H., Wanli, L., Xingqiang, Y., and Lin, T. (2017). Monetary Policy, Cash Holding and Corporate Investment Evidence from China. China Economic Review, 46, 110-122.
[51]. Ying, H., Yuxiu, H., Xuegang, C., Qiang, L., and Yuwen, Z. (2021). CEO Experience and Corporate Financing Decisions: Evidence from a Natural Experiment in China. China Economic Review, 70.
[52]. Lucas, A. D. S., and Flávia, Z. D. (2021). The Relationship Between Economic Policy Uncertainty and Corporate Leverage Evidence from Brazil. Finance Research Letters, 40.
[53]. Chenglin, G., and Takuji, W. T. (2023). Economic Uncertainty and Firms’ Capital Structure Evidence of China. Risks, 11(4), 66.
[54]. Jacob, H., R. Edward, F., and Stefan S. (2014). Applying Stakeholder Theory in Sustainability Management: Links, Similarities, Dissimilarities, and a Conceptual Framework. Organization & Environment, 27 (4), 328-346.
[55]. Thomas, M. J., Jeffrey, S. H., and Will, F. (2018). How Applying Instrumental Stakeholder Theory Can Provide Sustainable Competitive Advantage. Academy of Management Review, 43(3), 371-391.
[56]. Beiting, C., Ioannis, I., and George, S. (2013). Corporate Social Responsibility and Access to Finance. Strategic Management Journal, 35, 1-23.
[57]. James, E. M., Steven, A. H., and Lori, O. (2009). Governance Implications of the Effects of Stakeholder Management on Financial Reporting. The international journal of business in society, 9(3), 271-282.
[58]. Eric, A. F. (2010). CEO Pay Fairness as a Predictor of Stakeholder Management. Journal of Business Research, 63(4), 404-410.
[59]. Huang, Y., Li, J., and Wang, J. (2009). Analysis of the Shortcomings and Improvement of the Independent Director System in China. Proceedings of the 5th International Symposuim For Corporate Governance, Books 1 and 2,1536-1543.
[60]. Lin, R. (2017). Cross-Case Study on the Incentive Mechanism of Co-investment Projects in State Owned Enterprises from the Perspective of Employee Governance. Proceedings of the 2017 3rd International Conference on Economics, Social Science, Arts, Education and Management Engineering (ESSAEME 2017), 119, 231-236.
[61]. Joseph, E. C., and Jeffrey, S. H. (2010). Stakeholder Treatment Amongst IPOs and the Acquisition of Resources for Entrepreneurial Ventures. Journal of Enterprising Culture, 18(1), 29-48.
[62]. William, S., and Ryan, W. B. (2017). Experimental Evidence of Pooling Outcomes Under Information Asymmetry. Management Science, 63(5), 1586-1605.
[63]. Lu, Y., and Xiaohua, T. (2019). Will Corporate Social Responsibility Discourage Inefficient Investment? An Empirical Research based on Chinese Listed Companies. Proceedings of the 5th Annual International Conference on Social Science and Contemporary Humanity Development (SSCHD 2019), 376, 382-387.
[64]. Jacob, H., Stefan, S., and Sarah, E. W., (2015). Linking Sustainability-Related Stakeholder Feedback to Corporate Sustainability Performance: an Empirical Analysis of Stakeholder Dialogues. International Journal of Business Environment, 7(2), 200-218.
[65]. Irene, M. H., Jamal, A. N., and Fereshteh, M. (2015). Stakeholder Relationships, Engagement, and Sustainability Reporting. Journal of Business Ethics, 138, 417-435.
[66]. Dongmin, K., Jia, L., Yanan, W., and Ling, Z. (2023). Employee Stock Ownership Plans and Corporate Environmental Engagement. Journal of Business Ethics.
[67]. Mani, V., Gunasekaran, A., and Delgado, C. (2018). Enhancing Supply Chain Performance Through Supplier Social Sustainability an Emerging Economy Perspective. International Journal of Production Economics, 195, 259-272.
[68]. Zhixue, L., Ronggui, D., Lei, W., Rui, S. and Xinyi, S. (2022). Making Project Risk Response Decisions through Stakeholders' Impact on Project Risk Interaction. Construction Research Congress 2022: Project Management and Delivery, Contracts, and Design and Materials, 794-804.
[69]. Hannes, H., Christian, B., Christoph, B., and Michael, H. (2014). Sustainability-Related Supply Chain Risks: Conceptualization and Management. Business Strategy and the Environment, 23(3), 160-172.
[70]. Andrew, K. S., and Edward, C. T. (2014). Organizational Transparency: A New Perspective on Managing Trust in Organization-Stakeholder Relationships. Journal of Management, 42(7), 1784-1810.
[71]. Fassin, Y. (2011). A Dynamic Perspective in Freeman’s Stakeholder Model. Journal of Business Ethics, 96, 39-49.
[72]. Niccolò, N., Gabriele, S., Nicola, M., and Roberto, Q. (2021). Corporate Controversies and Company's Financial Performance: Exploring the Moderating Role of ESG Practices. Technological Forecasting and Social Change, 162.
[73]. Maretno, H., Indrarini, L., and Robert, L. (2014). Board Diversity and Corporate Social Responsibility. Journal of Business Ethics, 132(4), 641-660.
[74]. Feng, H., Hanyu, D., and Bo, Y. (2022). Corporate ESG Performance and Manager Misconduct: Evidence from China. International Review of Financial Analysis, 82.
[75]. Akrum, H., Rebecca, M., and Ahmed, A. (2023). Investigating the Factors That Determine the ESG Disclosure Practices in Europe. Sustainability, 15(6).
[76]. Benlemlih, M., and Bitar, M. (2016). Corporate Social Responsibility and Investment Efficiency. Journal of Business Ethics, 148, 647-671.
[77]. Jin-Wook, K., and Cheong-Kyu, P. (2022). Can ESG Performance Mitigate Information Asymmetry? Moderating Effect of Assurance Services. Applied Economics, 55(26), 2993-3007.
[78]. Bilyay-Erdogan, S. (2022). Corporate ESG Engagement and Information Asymmetry: the Moderating Role of Country-Level Institutional Differences. Journal of Sustainable Finance & Investment, Latest Articles.
[79]. Chunhua, L., Dianlong, W., and Feng, H. (2023). Corporate ESG Performance and Trade Credit Financing-Evidence From China. International Review of Economics & Finance, 85, 337-351.
[80]. Zahid, R. M. A., Saleem, A., and Maqsood, U. S. (2023). ESG Performance, Capital Financing Decisions, and Audit Quality: Empirical Evidence from Chinese State-Owned Enterprises. Environmental Science and Pollution Research, 30, 44086-44099.
[81]. Haifeng, G., Tenkir, S. L., Jiqiang, T., and Zhen, W. (2020). Financial Leverage and Firm Efficiency: the Mediating Role of Cash Holding. Applied Economics, 53(18).
[82]. May, H., and Jingjing, Y. (2015). The Role of Leverage in Cross-Border Mergers and Acquisitions. International Review of Economics & Finance, 43, 170-199.
[83]. Liu, W. L. (2014). Influence of Investment Fund on Stock Dividend Policy: Evidence from Chinese Listed Firms. Information Science and Management Engineering, 1-3(46), 29-36.
[84]. Dai, B., (2016). Cash Holding, Dividend Policy and Cash Flow Management: Dynamic Interaction Analysis Based on Chinese Listed Companies. 2016 International Conference on Management, Economics and Social Development (ICMESD 2016) , 1131-1136.
[85]. Hariyani, D. S., Ratnawati, T., and Rahmiyati, N. (2021). The Relationship Between Company Value and Good Financial Governance: Empirical Evidence from Indonesia. The Journal of Asian Finance, Economics and Business, 8(7), 447-456.