Media spotlight, corporate sustainability and the cost of debt

In this study, we examine the effect of media spotlight of corporate environmental, social, and governance (ESG) performance on corporate debt financing. We use the most influential media firm’s rankings of corporate ESG performance from 2009 to 2017 as a proxy of media spotlight. Positive media ESG spotlight significantly reduces firms’ cost of debt through enhancing reputation in supply chains, reducing financial risk and increasing corporate transparency. Media ESG spotlight plays a more important role for firms with poor corporate governance and firms located in provinces with more serious pollution.