Impact of ESG on Financial Distress in The Healthcare Sector Using Debt-Equity Ratio As A Moderator

This study analyzes how the Environment, Social, and Governance (ESG) factor, affects healthcare sector businesses' financial distress (FD) as indicated by Z-score. In this research, DER (Debt-Equity Ratio) moderates the relation between ESG and Z-score. The panel data (PD) regression analysis model (PDRAM) is used to examine the data. The data pertains to 33 companies providing healthcare services for twelve years (2011–2022). The debt-equity ratio moderates the relation between the explanatory factors and response factors. This work finds that there exists a non-positive relation established between ESG & Z-score. However, under the moderating impact of the D/E ratio, a positive relationship between Z-score and ESG is reported. This research finds practical implications in policy formulations at the governance level and project management at the corporate level. To the updated knowledge of authors, this research remains unique in analyzing a non-economic indicator's financial aspect in the healthcare sector.