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Sustainability Performance, Litigation Provisions and Corporate Bond Spreads

by Philipp a. Sostmann
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Current price ₹5,103.00
Original price ₹5,969.00
Original price ₹5,969.00
Original price ₹5,969.00
(-15%)
₹5,103.00
Current price ₹5,103.00

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Book cover type: Paperback
  • ISBN13: 9783668879188
  • Binding: Paperback
  • Subject: N/A
  • Publisher: Grin Verlag
  • Publisher Imprint: Grin Verlag
  • Publication Date:
  • Pages: 68
  • Original Price: USD 60.9
  • Language: English
  • Edition: N/A
  • Item Weight: 100 grams
  • BISAC Subject(s): Economics / General

Master's Thesis from the year 2017 in the subject Economics - Finance, grade: 8.5, Maastricht University, language: English, abstract: This study investigates the relation between corporate sustainability performance, corporations' litigation provisions and the yield spread of company issued bonds. Results show a significant negative relation between companies' ESG scores and their bond yield spreads. Most of this effect is accounted to the environmental performance of the company. Furthermore, I find support for a paradigm shift in the perception of sustainability performance. Whereas the effect on the yield spread was positive in years before the financial crisis, this relation turned negative subsequently. Besides that, country and industry facilitate a moderating role in the relationship. A strong ESG performance appears to significantly reduce bond spreads in the Mining industry and in more developed countries. Analyzing the relationship between sustainability performance and litigation provisions, I find that the ESG performance tends to reduce corporations' litigations in the years after 2012. Next to that, the social score has a significant positive relationship with litigation provisions. A mediation and moderation analysis of litigation provisions in the context of sustainability performance and yield spreads did not provide any significant findings. Finally, I conduct an event study attempting to find evidence for a possible causal relationship between sustainability performance and the yield spread.

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