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September 10, 2025International Journal of Economics and Management Sciences

ESG and Financial Distress: The Role of Moderation by the Cost of Debt

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MKMuhammad Onto Kusumo

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Overview

Analysis shows ESG improves financial stability in firms, indicating the cost of debt moderates this relationship.

Key Points

  • ESG performance significantly enhances firms' ability to meet interest obligations, reducing financial distress.
  • Stronger ESG practices positively influence interest coverage ratio, indicating better financial health.
  • The study applies panel data regression to analyze 655 firm-year observations from non-financial companies.
  • High cost of debt negatively impacts the benefits of ESG, highlighting the importance of financial structure.

Cite This Study

Muhammad Onto Kusumo (2025) studied this question.

synapsesocial.com/papers/68c23f1fb210217d64794c72https://doi.org/10.61132/ijems.v2i3.907
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