ESG Pillars and Corporate Equity Financing Behaviour in Asia Pacific Firms

Abstract

The study examines whether environmental, social, and governance performance is associated with equity issuance by non-financial firms across Asia-Pacific economies. While previous studies have mainly examined aggregate ESG scores, there is limited evidence on whether individual ESG pillars have distinct associations with equity issuance decisions among Asia-Pacific firms. The empirical sample covers 11,646 firm-year observations for 1,825 firms operating in 14 economies during 2010–2024. Fixed-effects estimation is used, along with alternative ESG specifications, Driscoll–Kraay estimation, dynamic analysis, and country-level estimation to test the robustness of the results. There are no statistically significant relationships between environmental performance and equity issuance, whereas the social and governance pillars exhibit relatively weak, statistically negative associations with equity issuance. Robustness evidence suggests that aggregate ESG measures provide broader sustainability signals, although the main findings remain pillar-based. Country-level analysis reveals substantial cross-economy variation, indicating that sustainability-related financing behaviour differs across institutional settings. The evidence extends the financing literature by showing how pillar-level sustainability signals relate to corporate equity financing across Asia-Pacific markets. The findings provide implications for managers, investors, and policymakers in understanding the role of ESG pillar-level information in corporate equity financing decisions across institutional settings.