Do ESG Bonds Have a Lower Financial Cost than Conventional Bonds?
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Abstract
The objectives of this research are to compare the financial cost of ESG bonds with those of conventional bonds and to examine the impact of ESG bonds on financial costs. The data used in this study consists of secondary data collected from the Thai Bond Market Association website and financial statements from 2019 to 2023, with a total of 1,267 samples. Multiple regression analysis is employed to test the research hypothesis. The results indicate that ESG bond type has a statistically significant negative relationship with credit spreads at the 0.01 level, which is consistent with the research hypothesis. This suggests that ESG bonds have a lower financial cost compared to conventional bonds. Additionally, the study reveals that bond credit ratings, return on assets (ROA) and company size have a significant negative relationship with credit spreads, while debts-to-assets ratio and current ratio exhibit a significant positive relationship. The findings support the notion that companies can benefit from issuing ESG bonds.
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