Carbon assurance, corporate capital structure, and debt maturity: global evidence

Abdullah Bugshan, Faisal Alnori, Walid Bakry, Rina Datt

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)
11 Downloads (Pure)

Abstract

This study used a cross-country sample of firms from 47 nations that participated in the Carbon Disclosure Project (CDP) questionnaire over the years 2011 and 2020, to examine whether the verification of carbon emissions information by an independent third party affects corporate capital structure and debt maturity decisions. Using alternative methods and robustness checks, we explore that carbon assurance importantly shapes both corporate capital structure and debt maturity. In particular, firms that are involved in independent carbon assurance have significantly higher leverage in their capital structure compared to non-assured firms. Further, assured firms have better access to long-term debt compared to non-assured firms. The outcomes of this study are attributed to the notion that the verification of carbon information increases the creditability of a firm's voluntary reporting and reduces its informational asymmetry between corporations and lenders.
Original languageEnglish
Article number112067
Number of pages6
JournalEconomics Letters
Volume245
DOIs
Publication statusPublished - Dec 2024

Keywords

  • leverage
  • Debt maturity
  • carbon assurance
  • sustainability
  • Capital structure

Fingerprint

Dive into the research topics of 'Carbon assurance, corporate capital structure, and debt maturity: global evidence'. Together they form a unique fingerprint.

Cite this