Abstract
This longitudinal study investigates the dynamic relationship between environmental, social, and corporate governance (ESG) performance and the cost of equity in listed companies in Iraq from 2016 to 2022. Utilizing a comprehensive dataset spanning multiple years, the study examines the evolving nature of this relationship over the specified time period. The research findings reveal a significant negative correlation between ESG performance and the cost of equity, indicating that companies with higher ESG scores tend to have lower costs of equity capital. Furthermore, the study explores the moderating effect of corporate financial inflexibility on this relationship. Results indicate that financial inflexibility acts as a moderator, decreasing the impact of ESG performance on the cost of equity capital in a decreasing direction. These findings contribute to the understanding of how corporate inflexibility influences the relationship between ESG practices and the cost of equity in the Iraqi context.
