Corporate sustainability and cost of equity capital : do managerial abilities matter?
Date
10/09/2022Keywords
Metadata
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Abstract
This paper investigates whether a firm’s managerial ability affects the link between a firm’s cost of equity capital and corporate sustainability. We test our predictions by using a large U.S. sample of 17,389 firm-year observations. Our findings show that only when managerial ability is high, corporate sustainability significantly reduces a firm’s implied cost of equity capital. An important implication of our findings is that firms with high managerial abilities and limited sustainability commitment are encouraged to pursue or initiate more sustainability activities owing to their negative effect on a firm’s cost of equity capital.
Citation
Hmaittane , A , Bouslah , K , M’Zali , B & Ibariouen , I 2022 , ' Corporate sustainability and cost of equity capital : do managerial abilities matter? ' , Sustainability , vol. 14 , no. 18 , 11363 . https://doi.org/10.3390/su141811363
Publication
Sustainability
Status
Peer reviewed
ISSN
2071-1050Type
Journal article
Rights
Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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