Citation:

Musdalifah Wahyu Suryaningtyas Yuliantoro Putri, Foza Hadyu Hasanatina. "The Role of Financial Metrics and ESG Involvement in Shaping Cost of Debt" International Research Journal of Economics and Management Studies, Vol. 4, No. 5, pp. 348-355, 2025.

Abstract:

This study aims to analyze the influence of financial and non-financial performance on the cost of debt in manufacturing companies listed on the Indonesia Stock Exchange between 2017-2022. Financial performances are indicated by profitability, liquidity, and leverage. Whereas non-financial performance is proxied by ESG disclosure score. Purposive sampling is used as a sampling technique to obtain 33 companies out of 345 total which provide annual reports on the Indonesia Stocks Exchange website and ESG Disclosure Score at Bloomberg Terminal. To examine the linkage, panel data regression is applied by Stata 17 software. The result of this study shows that profitability has a significant positive effect on the cost of debt. While leverage and ESG disclosure scores significantly negatively affect the cost of debt. Furthermore, liquidity has no significant effect on the cost of debt. The result also shows that COVID-19 distort the influence of profitability, leverage, and ESG disclosure score on cost of debt.

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Keywords:

Cost of Debt, Covid-19, ESG Disclosure Score, Leverage, Liquidity, Profitability.