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Corporate sustainability and trade credit financing: Evidence from environmental, social, and governance ratings

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  • Haowen Tian
  • Gaoliang Tian

Abstract

Using Chinese listed companies from 2009 to 2020, this study investigates the impact of corporate sustainability (measure by environmental, social and governance [ESG] ratings) of listed companies on trade credit financing. Empirical results show that better ESG performance is related to lower information risk and operation risk, which can further increase corporate trade credit financing. The results remain significant after a series of robustness tests. Moreover, such relationship is more pronounced for non‐state‐owned enterprises. The findings of this paper enrich the existing studies on the economic consequences of ESG performance, and influencing factors of corporate trade credit financing. Meanwhile, the findings may provide some implications for corporate managers, investors, and suppliers in making management or investment decisions.

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  • Haowen Tian & Gaoliang Tian, 2022. "Corporate sustainability and trade credit financing: Evidence from environmental, social, and governance ratings," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1896-1908, September.
    • Handle: RePEc:wly:corsem:v:29:y:2022:i:5:p:1896-1908
    DOI: 10.1002/csr.2335
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    6. Juzhang Feng & Sha Tang & Junhao Zhong, 2024. "Can corporate environmental, social, and governance performance influence foreign institutional investors to hold shares? Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4310-4330, July.
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    8. Zhihong Mao & Siyang Wang & Yu‐En Lin, 2024. "ESG, ESG rating divergence and earnings management: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3328-3347, July.
    9. Changchun Zhu & Na Li & Jing Ma, 2023. "Environmental backgrounds of CEOs and corporate environmental management information disclosure: The mediating effects of financing constraints and media attention," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 2885-2905, November.

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