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Studies on sustainable finance examine how it is interrelated with economic, social, governance and environmental issues. Using financial data on publicly traded firms in Indonesia, this study aims to explore the interplay between the cost of capital, firm performance and the COVID-19 pandemic.

This study uses firm-level data sets of publicly listed firms from 2012 to 2021. The regression analysis reported in the study includes the Driscoll–Kraay estimator, propensity score matching model and fixed-effects regression.

The study revealed three significant findings. First, on average, non-environmental, social and governance (ESG) companies’ cost of capital is lower than that of ESG firms. Second, ROE in ESG enterprises is significantly impacted by capital costs. Third, the cost of capital has a negative impact on the market value (Tobin’s q) of non-ESG firms. The study specifically shows that after accounting for the pandemic, ESG firms did not benefit during the troubled COVID-19 crisis after controlling for the pandemic dummy years of 2020 and 2021. These results indicate that the adoption of green or sustainable finance is still in its infancy and that the sector requires more time to establish an enabling environment.

This study benefits from capital structure and ESG theories. It supports the argument that the debt utilization ratio is still relevant to a company’s value because it affects its financial performance. Moreover, adopting ESG principles helps businesses survive crises. Thus, the analysis confirms the superiority of ESG-based firms.

This study draws two conclusions. First, the results could be a reference for academics and practitioners to understand the effect of pandemic-related crises on a firm’s capital structure and performance. In terms of survival during a crisis, such as the COVID-19 pandemic, this study demonstrates how firms with strong ESG may perform differently than those without ESG. Second, this study supports the need for an empirical study and examination of the development of sustainable finance in the country while considering setbacks.

The results should be of interest to policymakers who focus on the ESG market and academics conducting ESG-related research on emerging markets.

This study contributes to the literature by establishing empirical evidence on the relationship between the cost of capital and firm performance of ESG- and non-ESG-rated enterprises in the Indonesian setting while controlling for the impact of the pandemic.

This study aims to conduct a bibliometric analysis to provide a comprehensive picture and identify future research directions to enrich the existing literature on behavioral biases.

The data set comprises 518 articles from the Web of Science database. Performance analysis is used to highlight the significant contributors (authors, institutions, countries and journals) and contributions (highly influential articles) in the field of behavioral biases. In addition, network analysis is used to delve into the conceptual and social structure of the research domain.

The current review has identified four major themes: “Influence of behavioral biases on investment decisions,” “Determinants of home bias,” “Impact of biases on stock market variables” and “Investors’ decision-making under uncertainty.” These themes reveal that a majority of studies have focused on equity markets, and research on other asset classes remains underexplored.

This study extracted data from a single database (Web of Science) to ensure standardization of results. Consequently, future research could broaden the scope of the bibliometric review by incorporating multiple databases.

The novelty of this research is to provide valuable guidance by evaluating the existing literature and advancing the knowledge base on the conceptual and social structure of behavioral biases.