The Shadow Cost of Green Transition: Assessing the Asymmetric Effects of Green HRM Practices on Corporate Syndicated Loan and Bond Issuance Costs

Abstract

This study interrogates the conceptual tension between the micro level cultivation of green human capital and its macro level monetisation in corporate credit markets, asking whether internally embedded Green Human Resource Management (GHRM) practices translate into measurable differentials in the cost of debt across syndicated loan and bond issuance channels. Grounded in an integration of the Resource Based View, Signalling Theory, and Stakeholder Theory, the paper theorises that credit underwriters interpret robust GHRM systems as credible, difficult to imitate signals of environmental risk management capacity that attenuate perceived default risk. Drawing on survey data from 412 senior finance and human resource executives across carbon intensive and transition exposed industries, the analysis employs a two step Structural Equation Modeling (SEM) procedure, Confirmatory Factor Analysis (CFA), and a latent moderated mediation framework. Findings indicate that GHRM exerts a significant negative indirect effect on debt issuance cost through perceived environmental risk credibility, and that this transmission is asymmetrically conditioned by financing structure: the cost reducing effect is materially stronger for ESG labelled and sustainability linked instruments than for conventional debt. The study contributes a multilevel bridge connecting human resource architecture to capital market pricing and supplies actionable guidance for CFOs, CEOs, and CHROs seeking to convert sustainability investments into financing advantage.