Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/340574 
Year of Publication: 
2025
Citation: 
[Journal:] Borsa İstanbul Review [ISSN:] 2214-8469 [Volume:] 25 [Issue:] 2 [Year:] 2025 [Pages:] 337-349
Publisher: 
Elsevier, Amsterdam
Abstract: 
This study investigates the impact of Environmental, Social, and Governance (ESG) investments on corporate debt financing (CDF) in the BRICS (Brazil, Russia, India, China, and South Africa) economies throughout 2010 to 2022. A central aspect of this research is the moderating role of financial sector development (FSD), which potentially influences how ESG commitments affect corporate financing strategies in these rapidly evolving markets. The findings of two-step system Generalized Method of Moment indicate a negative correlation between ESG investments and CDF, suggesting that increased ESG commitments may initially restrict access to debt financing. Nonetheless, FSD serves as an important moderating variable, converting this adverse effect into a favorable one. A strong financial sector offers substantial funds under relaxed terms. In line with Porter's win-win hypothesis, the results indicate that sustainable practices can strengthen competitive advantage and financial performance, highlighting the importance of advancing FSD and incorporating ESG factors into corporate finance.
Subjects: 
Corporate debt financing
ESG investment
Financial sector development
GMM
JEL: 
G32
G38
M14
Q56
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
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