Sustainability Disclosures and Their Influence on Cost of Capital: A Comprehensive Bibliometric Study

Fatima, Kiran and Azam, Habiba and Sulehri, Fiaz Ahmad and Bukhari, Syeda Ambreen Fatima and Virk, Hafiz Khalique Ur Rehman and Geng, Yunjiang and Audi, Marc and Ashraf, Muhammad Saleem (2024): Sustainability Disclosures and Their Influence on Cost of Capital: A Comprehensive Bibliometric Study.

Abstract

Since the beginning of the twenty-first century, corporate social responsibility (CSR) has emerged as a global phenomenon in the business sector, capturing the attention of all stakeholders. Both early-stage and established firms often engage in high levels of voluntary disclosure, thereby reducing their cost of capital. This study synthesizes existing literature related to the impact of CSR on the cost of capital, focusing on sustainability and environmental disclosure. Utilizing the Scopus database, we conducted a bibliometric analysis through VOSviewer, analyzing 76 research articles from reputable academic journals published between 2002 and 2022. Our analysis identified three primary clusters: (1) the red cluster, titled "CSR and ESG disclosure and its impact on cost of capital" with 43 articles examining corporate social performance strategies, environmental risks, and green support; (2) the green cluster, titled "CSR activities and environmental or voluntary disclosure" with 21 articles focusing on corporate social investment, greenhouse gas emissions, voluntary disclosure, and their impact on cost of capital; and (3) the blue cluster, titled "sustainability disclosure or toxic release" with 12 articles centered on corporate social decoupling and toxic release. Our findings provide valuable insights for enhancing a firm's environmental and economic performance and offer guidance for decision-makers, lenders, investors, shareholders, and policymakers on reducing a firm's cost of capital through sustainability policies and strategies. Additionally, we highlight unexplored dimensions for future research, including forecasting firm investments using decoupling techniques, exploring the mediating role of CSR on the cost of capital, and examining the relationship between carbon intensity, greenhouse gases, and toxic release.

• Item Type: MPRA Paper
• Language: English
• Keywords: corporate social responsibility, sustainability, cost of capital
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General

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