Time: 2023/03/28 (Tue.), 13:30 – 15:00 (Beijing Time)

Title:    Environmental Penalty and Cost of Debt: Evidence from Chinese Firms

Venue: Zengxianzi Science Building 406

About the speaker:

赵大旋，新加坡国立大学博士, 中国人民大学商学院财务与金融系副教授，博士生导师。主要研究兴趣为房地产经济学与公司金融。论文发表于American Economic Journal: Economic Policy, Journal of Public Economics, Journal of Corporate Finance, Journal of Business Ethnics, Real Estate Economics等国际一流期刊。

Abstract:

We examine the impact of the environmental penalty announced within one month before the date of the bond issue on its interest rate in the Chinese bond market. We find a significant rise in the cost of the bond when the issuer is punished by environmental protection agencies, and this effect is more pronounced for non-SOEs, low-polluting firms, and firms with more attention. Additional evidence shows that the environmental penalty signals weak political connections, low accounting quality, and ignoring long-term investments. In addition, we find that firms are more likely to terminate bond issuance once an environmental penalty is announced during the underwriting process of the bond issue.