The effect of environmental information disclosure and energy product type on the cost of debt: Evidence from energy firms in China

This study examines the effect of environmental information disclosure (EID) and energy product type on Chinese energy firms' cost of debt (COD). Using a sample of Chinese energy firms over 2008-2014, we find a significant negative association between EID and the COD. We also observe a significant negative association between several energy product types (hydro power, oil, solar and wind) and energy firms' COD. Finally, we analyze the joint effect of EID and energy product type on energy firms' COD and find that when gas, thermal power generation, and hydro firms increase their level of EID their COD increases, but when solar and wind power firms increase their level of EID, this decreases their COD. Our findings are robust to several endogeneity checks.