B0659
Title: Can ESG shape the cost of capital: A bibliometric review and empirical analysis through ML
Authors: Niklas Bussmann - Università degli Studi di Pavia (Italy) [presenting]
Alessandra Tanda - Universita degli Studi di Pavia (Italy)
Ellen Pei-yi Yu - Birkbeck College - University of London (United Kingdom)
Abstract: The purpose is to investigate how environmental, social, and governance (ESG) related behaviour affects and contributes to the cost of capital, taken as a proxy for firm riskiness. The literature has devoted much effort lately to understanding if and how ESG and sustainable behaviour of companies enters the determination of companies' evaluation and riskiness. The aim is (i) to understand and analyse how this matter has been tackled by the previous empirical studies in the field; (ii) to employ AI methodologies to explain the impact of ESG behaviour on the cost of capital. To reach our research objectives, we first employ a bibliometric review tool to highlight the key variables that affect the cost of capital and secondly, we apply the XGBoost algorithm and SHAP framework to a sample of more than 1400 multinational companies located worldwide.
