The Impact of Accrual Quality on Cost of Equity in the Chinese Market: The Moderating Role of ESG Performance

DOI

10.2991/978-94-6463-888-2_36How to use a DOI?

Keywords

Accrual Quality; Cost of Equity; ESG Performance; Information Asymmetry; Emerging Markets China

Abstract

This research investigates the influence of accrual quality on the cost of equity within the context of the Chinese market, along with the moderating role of corporate Environmental, Social, and Governance (ESG) performance in this relationship. Utilizing data from non-financial listed companies in the Shanghai, Shenzhen, and Beijing A-share markets from 2011 to 2022, a multiple regression analysis was performed. The findings indicate that, amid investor information asymmetry, inferior accrual quality may lead to a reduced cost of equity for firms in the short term. Furthermore, the study identifies that a company’s ESG score significantly moderates the association between accrual quality and the cost of equity. Specifically, firms with high ESG scores exhibit enhanced information transparency and a heightened sense of responsibility, thereby reinforcing investor confidence and consequently lowering the cost of equity. This study’s contribution lies in elucidating the intricate relationship between accrual quality, ESG performance, and the cost of equity, while expanding the discourse on financial transparency and the cost of capital within emerging market contexts. The study provides empirical insights for academic and practical domains, aiming at optimizing corporate financial management and enhancing the quality of information disclosure. This investigation not only enriches researchers’ comprehension of the Chinese capital market but also offers novel perspectives and support for research and policy-making in related areas.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Lang Zhou
PY  - 2025
DA  - 2025/12/03
TI  - The Impact of Accrual Quality on Cost of Equity in the Chinese Market: The Moderating Role of ESG Performance
BT  - Proceedings of the 2025 7th International Conference on Economic Management and Cultural Industry (ICEMCI 2025)
PB  - Atlantis Press
SP  - 366
EP  - 376
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-888-2_36
DO  - 10.2991/978-94-6463-888-2_36
ID  - Zhou2025
ER  -