The effect of firm performance on the cost of capital for JSE listed mining companies

Author : Lieketseng Motalingoane, Rajendra Rajaram

Abstract : This study examines the influence of firm performance on the cost of capital (CoC) among mining firms listed on the Johannesburg Stock Exchange (JSE). Employing a panel dataset covering the period from 2018 to 2022, the study utilizes Panel Least Squares regression models to explore whether indicators such as return on assets (ROA), return on equity (ROE), firm size, leverage, book to-market ratio, and market beta significantly impact CoC. Although the analysis identifies a negative relationship between firm performance and CoC, the association is not statistically significant. These findings underscore the nuanced role that firm-level financial performance may play in determining financing costs in South Africa’s capital-intensive mining sector. The paper contributes to the broader corporate finance literature and provides practical insights for improving financial strategies in extractive industries

Keywords : firm performance, cost of capital, mining firms, corporate finance, financial performance, panel data analysis, and Johannesburg Stock Exchange.

Conference Name : International Conference on Financial Crises and Economic Stability (ICFCES-26)

Conference Place : Virtual, Malaga, Spain

Conference Date : 4th Jun 2026