Determinants and Economic Consequences of Banks Adopting the Equator Principles

• Main Authors: Dai-WeiLai, 賴岱瑋
• Other Authors: Jeng-Fang Chen
• Format: Others
• Language: en_US
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/b38y7a

碩士 === 國立成功大學 === 會計學系 === 105 === According to the Equator Principles official site, the Equator Principles (EPs) is a risk management framework for determining, assessing and managing environmental and social risk in financing projects. This paper examines the determinants and economic consequences of banks adopting the Equator Principles, which are measured using the database of local banks in Taiwan. The empirical analysis finds that banks with better corporate social responsibility performance, greater size and market-to-book ratio tend to adopt the Equator Principles. In return, these banks gain higher levels of institutional ownership, higher P/E ratio, and lower capital cost under the Equator Principles. Collectively, the results of this paper suggest that adopting the Equator Principles delivers economic benefits and lowers the cost of capital.