THE MODERATING EFFECTS OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE INFORMATION DISCLOSURE SCORES IN CORRELATION BETWEEN THE CAPITAL STRUCTURE AND THE PERFORMANCE OF THE LISTED COMPANIES IN THE STOCK EXCHANGE OF THAILAND
Keywords:
Capital Structure, ESG Information Disclosure Scores, Firm Performance, Moderating EffectAbstract
This research aims to examine the moderating effects of Environmental, Social, and Governance (ESG) information disclosure scores in correlation between the capital structure and the performance of the listed companies in the Stock Exchange of Thailand (SET).
The ESG information disclosure scores were measured according to the criteria of Bloomberg. The firm performance was measured by the market value to the book value of total assets (Tobin's Q ratio). The sample group consisted of 102 non-financial business listed companies (306 samples) in the SET from 2020 to 2022. Data were collected from the annual reports and 56-1 One Report of the companies as well as the ESG information exposure scores from the Bloomberg database. Descriptive statistics and inferential statistics were employed in the analysis of the data. The technique of multiple regression analysis was employed for the panel data. The research findings showed that the capital structure exhibited a direct influence in the opposite direction at a statistically significant level on the performance of the companies. The ESG information exposure scores did not exhibit a statistically significant level on the performance of the companies. In addition, it was also found that the ESG information disclosure scores exhibited moderating effects in correlation between the capital structure and the performance of the companies at a statistically significant level. The research results aligned with the concept of the trade-off theory and indicate that a study on the impact of capital structure on firm performance needs to be accompanied by ESG practices in delivering debates and filling gaps in previous research findings. ESG disclosure enhances the benefits of debt financing by reducing firms’ financial costs and overall risk. ESG disclosure enhances the benefits of debt financing by reducing financial costs and overall firm risk. Also, it helps maintain an optimal level of debt in the capital structure to enhance firm value effectively.
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