The Relationship Between Corporate Governance, ESG Performance, and Sustainable Firms’ Credit Ratings on The Stock Exchange of Thailand
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Abstract
This study aimed to 1) examine the relationship between executive shareholding structure and credit rating 2) investigate the relationship between good corporate governance and credit rating; and 3) explore the relationship between ESG performance and credit rating. This research employed a quantitative methodology, utilizing a sample of 177 companies listed on the Stock Exchange of Thailand (SET) within the SET 100 index, which were also selected as Thailand Sustainability Investment (THSI) stocks and assessed for ESG ratings. Secondary data was collected from the SET Market Analysis and Reporting Tool (SETSMART) for the period of 2021–2023, resulting in a total of 432 data points. Statistical analyses included Pearson’s Correlation Coefficient and Multiple Regression Analysis.
The findings revealed that 1) there is a low, inverse relationship between executive shareholding structure and credit rating; 2) there is a strong, positive relationship between good corporate governance and credit rating; and 3) there is a very low, positive relationship between ESG performance and credit rating. The results suggest that researchers should consider additional factors to further explain credit rating. Furthermore, higher scores in good corporate governance and ESG performance were found to positively influence credit ratings.
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