Does ESG Performance Help Corporate Deleveraging? Based on an Analysis of Excessive Corporate Debt
Abstract
:1. Introduction
2. Literature Review
2.1. Economic Consequences of ESG Performance
2.2. Factors Affecting Excessive Debt of Enterprises
3. Theoretical Analysis and Research Design
3.1. Theoretical Analysis
3.2. Sample and Data
3.3. Definition of Variables
3.3.1. Dependent Variable
3.3.2. Independent Variable
3.3.3. Control Variables
3.4. Model Construction
4. Empirical Results Analysis
4.1. Descriptive Statistics
4.2. Benchmark Regression Results
4.3. Endogeneity Test
4.3.1. Instrumental Variables
4.3.2. Heckman Two-Step
4.3.3. Propensity Score-Matching Method
4.4. Other Robustness Test
4.5. Mechanism Analysis
4.6. Heterogeneity Analysis
4.6.1. Differences in Industry Environmental Sensitivity
4.6.2. Differences in Marketization
4.7. Moderation Effect
4.7.1. The Moderating Effect of Internal Control
4.7.2. The Moderating Effect of Analyst Attention
5. Conclusions and Future Research
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variable Symbols | Variable Name | Variable Definition |
---|---|---|
EXLEVB | Over-indebtedness1 | The actual debt ratio of the enterprise minus the target debt ratio. |
LEVBDUM | Over-indebtedness2 | If the enterprise’s over-indebtedness ratio is positive, it is assigned a value of 1; otherwise, it is 0. |
ESG | ESG performance | Assign a value of 1–9 to C and CC to AAA in the ESG rating of Huazheng, respectively. |
SOE | Nature of property rights | Assign a value of 1 to state-owned enterprises and 0 to non-state-owned enterprises. |
ROA | Profitability | Operating profit/total assets. |
INDLEVB | Industry debt ratio | Median debt-to-asset ratio of the industry. |
GROWTH | Total assets growth rate | (Total assets at the end of this period − Total assets at the end of the previous period)/Total assets at the end of the previous period. |
FATA | Fixed assets ratio | Fixed assets/total assets. |
SIZE | Enterprise scale | Logarithm of total assets. |
SHRCR1 | The largest shareholder’s shareholding | The proportion of the largest shareholder’s shareholding in the total share capital. |
BM | Book-to-Market Ratio | Book value/market value. |
MANEXP | Management expense ratio | Book value/market value. |
NDTS | Non-debt tax shield | (Depreciation of fixed assets + depreciation of oil and gas assets + depreciation of productive biological assets)/total assets. |
ETR | Income tax rate | Income tax/total profit. |
VEBITTA | Earnings volatility | Earnings Before Interest and Tax/Three-year volatility of total assets. |
VCF | Cash flow volatility | Total cash flow/Three-year volatility of total assets. |
MANOWN | Management shareholding ratio | The proportion of total shares held by all senior managers of the company at the end of the year to the total share capital. |
Variables | N | Mean | SD | Min | Max |
---|---|---|---|---|---|
EXLEVB | 14,465 | 0.004 | 0.139 | −0.356 | 0.381 |
LEVBDUM | 14,465 | 0.509 | 0.500 | 0 | 1.000 |
ESG | 14,465 | 4.210 | 0.929 | 1.000 | 8.000 |
SOE | 14,465 | 0.316 | 0.465 | 0 | 1.000 |
ROA | 14,465 | 0.045 | 0.055 | −0.224 | 0.197 |
IND_LEVB | 14,465 | 0.412 | 0.092 | 0.260 | 0.714 |
GROWTH | 14,465 | 0.178 | 0.243 | −0.276 | 1.190 |
FATA | 14,465 | 0.218 | 0.153 | 0.002 | 0.692 |
SIZE | 14,465 | 22.476 | 1.290 | 19.963 | 26.262 |
SHRCR1 | 14,465 | 33.747 | 14.456 | 9.200 | 74.300 |
BM | 14,465 | 0.327 | 0.149 | 0.049 | 0.786 |
MANEXP | 14,465 | 0.041 | 0.025 | 0.004 | 0.131 |
NDTS | 14,465 | 0.02 | 0.014 | 0 | 0.066 |
ETR | 14,465 | 0.151 | 0.147 | −0.49 | 0.728 |
VEBITTA | 14,465 | 0.028 | 0.035 | 0.001 | 0.249 |
VCF | 14,465 | 0.043 | 0.034 | 0.003 | 0.204 |
MANOWN | 14,465 | 14.563 | 19.199 | 0 | 67.565 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Variables | EXLEVB | LEVBDUM | EXLEVB | LEVBDUM |
ESG | −0.0063 *** | −0.0722 *** | −0.0090 *** | −0.1014 *** |
(−5.99) | (−5.63) | (−8.91) | (−7.18) | |
SOE | −0.0117 *** | −0.1344 *** | −0.0022 | −0.0848 ** |
(−4.79) | (−4.52) | (−0.92) | (−2.55) | |
ROA | −0.5499 *** | −5.2045 *** | −0.5643 *** | −6.0618 *** |
(−28.62) | (−20.41) | (−31.03) | (−21.32) | |
IND_LEVB | −0.1446 *** | −1.1363 *** | −0.1957 *** | −2.2645 *** |
(−12.68) | (−8.27) | (−5.35) | (−4.34) | |
GROWTH | 0.0755 *** | 0.6698 *** | 0.1006 *** | 0.9570 *** |
(18.18) | (12.02) | (25.72) | (16.09) | |
FATA | 0.0587 *** | 0.5941 *** | 0.0784 *** | 0.9719 *** |
(5.28) | (4.36) | (6.82) | (5.96) | |
SIZE | 0.0112 *** | 0.1351 *** | 0.0077 *** | 0.1271 *** |
(12.08) | (11.68) | (7.98) | (9.02) | |
SHRCR1 | 0.0007 *** | 0.0056 *** | 0.0007 *** | 0.0060 *** |
(11.00) | (6.69) | (11.48) | (6.55) | |
BM | −0.4765 *** | −4.5871 *** | −0.5611 *** | −5.9273 *** |
(−72.15) | (−49.66) | (−84.93) | (−52.05) | |
manage | −0.2080 *** | −2.3172 *** | 0.1572 *** | 1.2646 ** |
(−4.71) | (−4.23) | (3.49) | (2.00) | |
NDTS | −0.3743 *** | −2.0569 | −0.4730 *** | −5.6622 *** |
(−3.02) | (−1.35) | (−3.87) | (−3.24) | |
ETR | 0.0183 *** | 0.1690 ** | 0.0217 *** | 0.2327 *** |
(2.79) | (2.12) | (3.50) | (2.69) | |
VEBITTA | −0.3303 *** | −3.2283 *** | −0.3331 *** | −3.5871 *** |
(−10.61) | (−7.98) | (−11.28) | (−7.86) | |
VCF | 0.4242 *** | 4.2933 *** | 0.3936 *** | 4.4268 *** |
(14.33) | (11.48) | (13.94) | (10.74) | |
MANOWN | 0.0003 *** | 0.0030 *** | 0.0003 *** | 0.0038 *** |
(4.78) | (4.08) | (5.53) | (4.89) | |
Year FE | N | N | Y | Y |
Industry FE | N | N | Y | Y |
Adj_R2 | 0.341 | 0.450 |
(1) | (2) | (3) | |
---|---|---|---|
ESG | EXLEVB | LEVBDUM | |
Number of ESG fund holdings | 0.0154 *** | ||
(8.13) | |||
ESG | −0.2609 *** | −2.9524 *** | |
(−7.58) | (−7.30) | ||
Controls | Y | Y | Y |
Year FE | Y | Y | Y |
Industry FE | Y | Y | Y |
Cragg-Donald Wald F/Wald test | 70.703 *** | 206.88 *** | |
Adj_R2 | 0.169 | −2.173 |
Heckman Two-Step | PSM | ||||
---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | |
ESGDUM | EXLEVB | LEVBDUM | EXLEVB | LEVBDUM | |
ESG | 3.1870 *** | −0.0100 *** | −0.1469 *** | −0.0075 *** | −0.0988 *** |
(60.99) | (−3.52) | (−3.66) | (−5.37) | (−4.93) | |
IMR | −0.0005 | −0.0222 | |||
(−0.41) | (−1.21) | ||||
Controls | Y | Y | Y | Y | |
Year FE | Y | Y | Y | Y | |
Industry FE | Y | Y | Y | Y | |
Adj_R2 | 0.450 | 0.456 |
Replace Explained Variable | Joint Fixed Effects | Firm Fixed Effects | Replace Explanatory Variables | |||||
---|---|---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | |
exlevb | exdum | EXLEVB | LEVBDUM | EXLEVB | LEVBDUM | EXLEVB | LEVBDUM | |
ESG | −0.0157 *** | −0.1531 *** | −0.0094 *** | −0.1145 *** | −0.0047 *** | −0.1309 *** | ||
(−15.50) | (−9.52) | (−9.05) | (−7.59) | (−3.82) | (−6.37) | |||
ESGpb | −0.0005 ** | −0.0096 *** | ||||||
(−2.34) | (−2.87) | |||||||
Controls | Y | Y | Y | Y | Y | Y | Y | Y |
Year FE | Y | Y | Y | Y | Y | Y | Y | Y |
Industry FE | Y | Y | Y | Y | Y | Y | Y | Y |
Adj_R2 | 0.641 | 0.460 | 0.630 | 0.450 |
Information Transparency | Financing Costs, Short-Term Debt, and Long-Term Use | Business Performance | ||||
---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | |
Toumd | High | COD | SLEV | ROA | TobinQ | |
ESG | 0.1253 *** | 0.2584 *** | −0.0024 *** | −0.0099 *** | 0.0071 *** | 0.0745 *** |
(23.53) | (17.14) | (−4.92) | (−12.87) | (15.53) | (7.59) | |
Controls | Y | Y | Y | Y | Y | Y |
Year FE | Y | Y | Y | Y | Y | Y |
Industry FE | Y | Y | Y | Y | Y | Y |
Adj_R2 | 0.207 | 0.163 | 0.341 | 0.210 | 0.529 |
(1) | (2) | (3) | (4) | (5) | (6) | |
---|---|---|---|---|---|---|
Non-Polluting Industries | Polluting Industries | Interaction Test | Non-Polluting Industries | Polluting Industries | Interaction Test | |
EXLEVB | EXLEVB | EXLEVB | LEVBDUM | LEVBDUM | LEVBDUM | |
ESG | −0.0070 *** | −0.0126 *** | −0.0586 *** | −0.1903 *** | ||
(−5.63) | (−7.31) | (−3.37) | (−7.70) | |||
ESGWR | −0.0049 ** | −0.1134 *** | ||||
(−2.44) | (−3.92) | |||||
Controls | Y | Y | Y | Y | Y | Y |
Year FE | Y | Y | Y | Y | Y | Y |
Industry FE | Y | Y | Y | Y | Y | Y |
Adj_R2 | 0.447 | 0.458 | 0.450 |
(1) | (2) | (3) | (4) | (5) | (6) | |
---|---|---|---|---|---|---|
Low Marketization | A High Degree of Marketization | Interaction Test | Low Marketization | A High Degree of Marketization | Interaction Test | |
EXLEVB | EXLEVB | EXLEVB | LEVBDUM | LEVBDUM | LEVBDUM | |
ESG | −0.0122 *** | −0.0061 *** | −0.1564 *** | −0.0548 *** | ||
(−8.38) | (−4.31) | (−7.52) | (−2.75) | |||
ESGMAR | 0.0046 ** | 0.0864 *** | ||||
(2.46) | (3.28) | |||||
Controls | Y | Y | Y | Y | Y | Y |
Year FE | Y | Y | Y | Y | Y | Y |
Industry FE | Y | Y | Y | Y | Y | Y |
Adj_R2 | 0.462 | 0.456 | 0.450 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
EXLEVB | LEVBDUM | EXLEVB | LEVBDUM | |
ESG | 0.0015 | 0.1499 ** | −0.0055 *** | −0.0502 *** |
(0.31) | (2.14) | (−4.11) | (−2.72) | |
ESGICQ | −0.0016 ** | −0.0380 *** | ||
(−2.08) | (−3.59) | |||
ICQ | 0.0037 | 0.1086 *** | ||
(1.23) | (2.62) | |||
ESGHICQ | −0.0073 *** | −0.1062 *** | ||
(−3.87) | (−4.00) | |||
HICQ | 0.0272 *** | 0.4172 *** | ||
(3.36) | (3.64) | |||
Controls | Y | Y | Y | Y |
Year FE | Y | Y | Y | Y |
Industry FE | Y | Y | Y | Y |
Adj_R2 | 0.450 | 0.450 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
EXLEVB | LEVBDUM | EXLEVB | LEVBDUM | |
ESG | 0.0125 *** | 0.1598 *** | −0.0007 | 0.0062 |
(5.62) | (4.98) | (−0.51) | (0.34) | |
ESGAnalyst | −0.0094 *** | −0.1146 *** | ||
(−9.43) | (−7.94) | |||
Analyst | 0.0178 *** | 0.2392 *** | ||
(4.04) | (3.76) | |||
ESGHAnalyst | −0.0160 *** | −0.2066 *** | ||
(−8.45) | (−7.66) | |||
HAnalyst | 0.0449 *** | 0.6025 *** | ||
(5.49) | (5.18) | |||
Controls | Y | Y | ||
Year FE | Y | Y | ||
Industry FE | Y | Y | ||
Adj_R2 | 0.466 | 0.457 |
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Zhu, T.; Liu, D.; Zhang, L. Does ESG Performance Help Corporate Deleveraging? Based on an Analysis of Excessive Corporate Debt. Sustainability 2025, 17, 1274. https://doi.org/10.3390/su17031274
Zhu T, Liu D, Zhang L. Does ESG Performance Help Corporate Deleveraging? Based on an Analysis of Excessive Corporate Debt. Sustainability. 2025; 17(3):1274. https://doi.org/10.3390/su17031274
Chicago/Turabian StyleZhu, Tao, Dongjiao Liu, and Lequan Zhang. 2025. "Does ESG Performance Help Corporate Deleveraging? Based on an Analysis of Excessive Corporate Debt" Sustainability 17, no. 3: 1274. https://doi.org/10.3390/su17031274
APA StyleZhu, T., Liu, D., & Zhang, L. (2025). Does ESG Performance Help Corporate Deleveraging? Based on an Analysis of Excessive Corporate Debt. Sustainability, 17(3), 1274. https://doi.org/10.3390/su17031274