Non-financial information and cost of equity capital: an empirical analysis in the food and beverage industry

2020/07/02 by Nicola Raimo, Elbano de Nuccio, Anastasia Giakoumelou +2 · 1 citation
Business, Management and Accounting · #Auditing, Earnings Management, Governance #Corporate Finance and Governance #Corporate Social Responsibility Reporting

paper · doi:10.1108/bfj-03-2020-0278

crossref issued 2020/07/02 · crossref published 2020/07/02 · crossref published-online 2020/07/02 · openalex publication_date 2020/07/02 · crossref created 2020/07/02 · openalex created_date 2020/07/10 · crossref published-print 2020/12/24 · crossref deposited 2025/07/24 · crossref indexed 2026/07/31 · openalex updated_date 2026/07/31

Abstract

Purpose This study examines the effect that environmental, social and governance (ESG) disclosure generates on the cost of equity capital in the food and beverage (F&B) sector. Design/methodology/approach This study analyses a sample of 171 international listed firms pertaining to the F&B sector and headquartered in North America, Western Europe and Asia Pacific (developed), forming an unbalanced panel of 1,316 observations, spanning the period 2010–2019. We run a fixed-effects panel regression model to test the relationship between ESG disclosure and the cost of equity capital. Findings Our empirical outcomes suggest a significant negative relationship between ESG disclosure and the cost of equity capital. We find support for the notion that increased levels of ESG disclosure are linked to an improved access to financial resources for firms. Originality/value This is the first study that analyses the impact of ESG disclosure on the cost of equity capital in the F&B sector, taking existing literature a step further into more detailed and specific aspects of the relationship of focus.

Citations

• Disclosure level and the cost of equity capital.
• A Simple Model of Capital Market Equilibrium with Incomplete Information
• Assessing Alternative Proxies for the Expected Risk Premium
• Earnings, Book Values, and Dividends in Equity Valuation*
• An Evaluation of Accounting-Based Measures of Expected Returns
• Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting
• PE Ratios, PEG Ratios, and Estimating the Implied Expected Rate of Return on Equity Capital
• Accounting Information, Disclosure, and the Cost of Capital
• Toward an Implied Cost of Capital
• The Company and the Product: Corporate Associations and Consumer Product Responses

Cited by

• Corporate controversies and company's financial performance: Exploring the moderating role of ESG practices

Related

• Disclosure level and the cost of equity capital.
• Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting
• Extending the benefits of ESG disclosure: The effect on the cost of debt financing
• The Effects of Mandatory ESG Disclosure Around the World
• Mandatory disclosure, greenhouse gas emissions and the cost of equity capital: UK evidence of a U‐shaped relationship