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The Role of ESG Performance in the Capital Structure-Market Competition Nexus: Some Evidence from Japan
Department of Agribusiness and Supply Chain Management, Agricultural University of Athens, Thebes, Greece
Department of Agricultural Economics and Rural Development, Agricultural University of Athens, Athens, Greece
Department of Agricultural Economics and Rural Development, Agricultural University of Athens, Athens, Greece
Department of Agribusiness and Supply Chain Management, Agricultural University of Athens, Thebes, Greece
- 1 Department of Agribusiness and Supply Chain Management, Agricultural University of Athens, Thebes, Greece
- 2 Department of Agricultural Economics and Rural Development, Agricultural University of Athens, Athens, Greece
- 3 Department of Agricultural Economics and Rural Development, Agricultural University of Athens, Athens, Greece
- 4 Department of Agribusiness and Supply Chain Management, Agricultural University of Athens, Thebes, Greece
Theoretical Economics Letters·Volume 13 (2023)·Pages 525–534·Published 18 May 2023·DOI10.4236/tel.2023.133033
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Abstract
This study investigates the relationship between market competition and cap ital structure and the respective role of ESG performance. Using 5112 firm-year observations from firms listed on the Tokyo Stock Exchange between 2002 and 2020, we document a negative relationship between market competition and capital structure. Also, we find that ESG performance moderates this relationship. Our findings support the “deep pocket” theory of predation and emphasize the benefits of a superior ESG performance.
KeywordsCapital StructureMarket CompetitionESGPredation ModelsLimited Liability Models
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