Work

The impact of ESG reporting on the cost of equity capital in India: The moderating role of external auditors

Year: 2025

Type: article

Abstract: This study examines the association between ESG reporting and the cost of equity capital, focusing on the influence of Big 4 auditors. Using 2,454 firm-year observations in India from 2016 to 2021, we find that higher ESG scores relate to lower costs of equity capital. Also, the main analysis reveals that the presence of Big 4 auditors strengthens the negative association between ESG scores and the cost of equity capital. This supports the view that Big 4 auditors enhance investor confidence in the credibility of sustainability reporting, reducing the cost of equity capital. These findings are validated through various tests.

Source: IIMB Management Review

DOI: 10.1016/j.iimb.2025.100615

Authors: Archana Patro, Geeti Mishra, Cheng-Hsun Lee

Institutions: Indian Institute of Management Bodh Gaya, Indian Institute of Management Indore, National Cheng Kung University

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $1,200

OpenAlex ID: W4415079695

FWCI: 1.777

Cites: 90

Cited by: 2

Related to: