The Influence of the Debt Cost and Environmental, Social, and Governance (ESG) Responsibilities on Firm Value of Companies Listed on the Stock Exchange of Thailand
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Abstract
This study investigates the influence of the cost of debt on corporate environmental, social, and governance (ESG) responsibility, as well as the impact of ESG responsibility on firm value. The sample comprises companies listed on the Stock Exchange of Thailand, with data collected from annual reports, the annual registration statement (Form 56-1), and ESG disclosure scores from the Bloomberg database, covering 750 firm-year observations from 2022 to 2024. Structural Equation Modeling (SEM) with Path Analysis was used employing the Maximum Likelihood (ML) estimation method. The model exhibited good fit with the empirical data (CMIN = 268.639, CMIN/DF = 2.398, CFI = 0.971, GFI = 0.965, AGFI = 0.948, TLI = 0.962, SRMR = 0.02, RMSEA = 0.031). Results indicate that (1) the cost of debt positively influences corporate ESG responsibility, and (2) ESG responsibility positively affects firm value. These findings suggest that effective debt cost management can promote ESG practices, thereby enhancing firm value in the long term. This provides valuable insights for integrating financial strategies with sustainable business practices.
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