THE EFFECT OF ESG RATING ON FIRM CREDIT RATING
This research aims to evaluates the relationship between Environment, Social and Governance (ESG) rating and firm credit rating. The study focuses on listed companies in Indonesia and tries to examine the relationship using ordered probit regression model to reach conclusion of this study. The fi...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/61076 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | This research aims to evaluates the relationship between Environment, Social and Governance
(ESG) rating and firm credit rating. The study focuses on listed companies in Indonesia and
tries to examine the relationship using ordered probit regression model to reach conclusion of
this study. The findings show from three pillars of ESG, only environment and governance
significantly affect firm credit rating. Specifically, firm credit ratings are negatively associated
with environment pillar and positively related with governance pillar. This research also
documents that individual categories of each ESG pillar possess different significance and
effect. This research results show that resource use, emission, human rights, management, and
shareholders significantly affect firm credit rating. However, only emission and management
possess positive effect. The overall research shows ESG rating as a non-financial information
plays a huge role creditworthiness. |
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