Cost of Capital Revisited: Trends and Insights via Bibliometric Analysis and Literature Review
Abstract
This study explores the evolving landscape of cost of capital research through a bibliometric analysis and literature review. Examining publications from the Scopus database, the research identifies significant trends in scholarly output and country contributions over the past two decades. The bibliometric analysis reveals key thematic clusters, such as investment, risk, and capital structure, and highlights shifts in popular keywords over time. Concurrently, a comprehensive literature review synthesizes findings on the crucial importance of the cost of capital for business performance, sustainability, and competitive advantage. It also elucidates various strategies and solutions for its effective management and improvement. The study provides insights into the practical implications of optimizing the cost of capital for businesses and organizations, contributing to a holistic understanding of its role in financial decision-making.
References
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Brusov, P., & Filatova, T. (2023). Capital structure theory: Past, present, future. Mathematics, 11(3), 616. https://doi.org/10.3390/math11030616
Chaklader, B., & Padmapriya, B. (2021). Impact of cash surplus on firm’s capital structure: validation of pecking order theory. Managerial Finance, 47(12), 1801–1816. https://doi.org/10.1108/mf-08-2020-0417
Donthu, N., Kumar, S., Mukherjee, D., Pandey, N., & Lim, W. M. (2021). How to conduct a bibliometric analysis: An overview and guidelines. Journal of Business Research, 133, 285–296. https://doi.org/10.1016/j.jbusres.2021.04.070
Dosso, M., & Vezzani, A. (2020). Firm market valuation and intellectual property assets. Industry and Innovation, 27(7), 705–729. https://doi.org/10.1080/13662716.2019.1685374
Dua, J., & Sharma, A. K. (2024). Corporate sustainability and capital costs: A panel evidence from BRICS countries. Indian Journal of Corporate Governance, 17(1), 77–101. https://doi.org/10.1177/09746862241240368
Duho, K. C. T., Onumah, J. M., Owodo, R. A., Asare, E. T., & Onumah, R. M. (2020). Bank risk, profit efficiency and profitability in a frontier market. Journal of Economic and Administrative Sciences, 36(4), 381–402. https://doi.org/10.1108/jeas-01-2019-0009
Falchetta, G., Michoud, B., Hafner, M., & Rother, M. (2022). Harnessing finance for a new era of decentralised electricity access: A review of private investment patterns and emerging business models. Energy Research & Social Science, 90(102587), 102587. https://doi.org/10.1016/j.erss.2022.102587
Fama, E. F., & French, K. R. (1999). The corporate cost of capital and the return on corporate investment. The Journal of Finance, 54(6), 1939–1967. https://doi.org/10.1111/0022-1082.00178
Gunawan, W. B. (2025). MSME Sustainability as the Key to Sustainability: Role and Contribution of MSMEs to Sustainability with a Bibliometric Approach and Literature Review. Equator Journal of Management and Entrepreneur, 13(1), 1–17. https://doi.org/10.26418/ejme.v13i1.89630
Houqe, M. N., Khan, H. Z., Moses, O., & Elias, A. (2024). Corporate reputation, cost of capital and the moderating role of economic development: international evidence. Meditari Accountancy Research, 32(4), 1106–1134. https://doi.org/10.1108/medar-03-2023-1951
Javaid, A., Nazir, M. S., & Fatima, K. (2023). Impact of corporate governance on capital structure: mediating role of cost of capital. Journal of Economic and Administrative Sciences, 39(4), 760–780. https://doi.org/10.1108/jeas-09-2020-0157
Judge, A., & Korzhenitskaya, A. (2021). Do credit ratings determine capital structure? International Journal of the Economics of Business, 1–30. https://doi.org/10.1080/13571516.2021.1961563
Kahtani, N. A., & Eraij, M. A. (2018). Does capital structure matter? Reflection on capital structure irrelevance theory: Modigliani-Miller theorem (MM 1958). International Journal of Financial Services Management, 9(1), 39. https://doi.org/10.1504/ijfsm.2018.089918
Kalash, I. (2023). The financial leverage–financial performance relationship in the emerging market of Turkey: the role of financial distress risk and currency crisis. EuroMed Journal of Business, 18(1), 1–20. https://doi.org/10.1108/emjb-04-2021-0056
Khan, K. I., Qadeer, F., Mata, M. N., Chavaglia Neto, J., Sabir, Q. ul A., Martins, J. N., & Filipe, J. A. (2021). Core predictors of debt specialization: A new insight to optimal capital structure. Mathematics, 9(9), 975. https://doi.org/10.3390/math9090975
Kruk, S. (2021). Impact of capital structure on corporate value—review of literature. Journal of Risk and Financial Management, 14(4), 155. https://doi.org/10.3390/jrfm14040155
Laghi, E., & Di Marcantonio, M. (2016). Beyond CAPM: estimating the cost of equity considering idiosyncratic risks. Quantitative Finance, 16(8), 1273–1296. https://doi.org/10.1080/14697688.2015.1124136
Mehzabin, S., Shahriar, A., Hoque, M. N., Wanke, P., & Azad, M. A. K. (2022). The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia. Asian Journal of Economics and Banking. https://doi.org/10.1108/ajeb-03-2022-0036
Mensah, L., Bein, M. A., & Arhinful, R. (2025). The impact of capital structure on business growth under IFRS adoption: Evidence from firms listed in the Frankfurt Stock Exchange. SAGE Open, 15(2). https://doi.org/10.1177/21582440251336533
Mudalige, H. M. N. K. (2023). The art of timing: Unpacking the market timing’s long -term impact on capital structure : With reference to listed companies in Colombo Stock Exchange. International Journal of Accounting and Business Finance, 9(2), 18–44. https://doi.org/10.4038/ijabf.v9i2.141
Nahar, P., & Chauhan, Y. (2025). Creditor rights, bank monitoring, and corporate risk-taking: evidence from creditor rights reform. Applied Economics, 1–21. https://doi.org/10.1080/00036846.2025.2497559
Nazir, M., Akbar, M., Akbar, A., Poulovo, P., Hussain, A., & Qureshi, M. A. (2022). The nexus between corporate environment, social, and governance performance and cost of capital: evidence from top global tech leaders. Environmental Science and Pollution Research International, 29(15), 22623–22636. https://doi.org/10.1007/s11356-021-17362-0
Nukala, V. B., & Prasada Rao, S. S. (2021). Role of debt-to-equity ratio in project investment valuation, assessing risk and return in capital markets. Future Business Journal, 7(1). https://doi.org/10.1186/s43093-021-00058-9
Rodríguez, R. A. (2024). A novel approach to calculate weighted average cost of capital (WACC) considering debt and firm’s cash flow durations. Managerial and Decision Economics: MDE, 45(2), 1154–1179. https://doi.org/10.1002/mde.4042
Singh, V. K., Singh, P., Karmakar, M., Leta, J., & Mayr, P. (2021). The journal coverage of Web of Science, Scopus and Dimensions: A comparative analysis. Scientometrics, 126(6), 5113–5142. https://doi.org/10.1007/s11192-021-03948-5
Tanjung, M. (2023). Cost of capital and firm performance of ESG companies: what can we infer from COVID-19 pandemic? Sustainability Accounting Management and Policy Journal, 14(6), 1242–1267. https://doi.org/10.1108/sampj-07-2022-0396
Tarulli, A., Morrone, D., Conte, D., Bussoli, C., & Russo, A. (2023). The relevance of non‐financial disclosure in influencing the cost of capital: Empirical evidence from the agri‐food sector. Business Strategy and the Environment, 32(4), 1739–1751. https://doi.org/10.1002/bse.3215
Upreti, V., Adams, M., & Jia, Y. (2022). Risk management and the cost of equity: evidence from the United Kingdom’s non-life insurance market. European Journal of Finance, 28(6), 551–570. https://doi.org/10.1080/1351847x.2021.1936588
Vartiainen, E., Masson, G., Breyer, C., Moser, D., & Román Medina, E. (2020). Impact of weighted average cost of capital, capital expenditure, and other parameters on future utility‐scale PV levelised cost of electricity. Progress in Photovoltaics, 28(6), 439–453. https://doi.org/10.1002/pip.3189
Yannelis, C., & Zhang, A. L. (2023). Competition and selection in credit markets. Journal of Financial Economics, 150(2), 103710. https://doi.org/10.1016/j.jfineco.2023.103710
Zopounidis, C., & Lemonakis, C. (2024). The company of the future: Integrating sustainability, growth, and profitability in contemporary business models. Development and Sustainability in Economics and Finance, 1(100003), 100003. https://doi.org/10.1016/j.dsef.2024.100003
Alam, S., Jumady, E., Fajriah, Y., Halim, A., & Hatta, S. (2024). Integrating Total Quality Management with strategic, operational, and human resource management: A qualitative exploration of synergies for enhanced organizational performance. Golden Ratio of Marketing and Applied Psychology of Business, 4(2), 88–100. https://doi.org/10.52970/grmapb.v4i2.439
AlHares, A. (2020). Corporate governance and cost of capital in OECD countries. International Journal of Accounting and Information Management, 28(1), 1–21. https://doi.org/10.1108/ijaim-02-2019-0023
Arhinful, R., & Radmehr, M. (2023). The impact of financial leverage on the financial performance of the firms listed on the Tokyo stock exchange. SAGE Open, 13(4). https://doi.org/10.1177/21582440231204099
Baule, R. (2019). The cost of debt capital revisited. BuR - Business Research, 12(2), 721–753. https://doi.org/10.1007/s40685-018-0070-6
Brusov, P., & Filatova, T. (2023). Capital structure theory: Past, present, future. Mathematics, 11(3), 616. https://doi.org/10.3390/math11030616
Chaklader, B., & Padmapriya, B. (2021). Impact of cash surplus on firm’s capital structure: validation of pecking order theory. Managerial Finance, 47(12), 1801–1816. https://doi.org/10.1108/mf-08-2020-0417
Donthu, N., Kumar, S., Mukherjee, D., Pandey, N., & Lim, W. M. (2021). How to conduct a bibliometric analysis: An overview and guidelines. Journal of Business Research, 133, 285–296. https://doi.org/10.1016/j.jbusres.2021.04.070
Dosso, M., & Vezzani, A. (2020). Firm market valuation and intellectual property assets. Industry and Innovation, 27(7), 705–729. https://doi.org/10.1080/13662716.2019.1685374
Dua, J., & Sharma, A. K. (2024). Corporate sustainability and capital costs: A panel evidence from BRICS countries. Indian Journal of Corporate Governance, 17(1), 77–101. https://doi.org/10.1177/09746862241240368
Duho, K. C. T., Onumah, J. M., Owodo, R. A., Asare, E. T., & Onumah, R. M. (2020). Bank risk, profit efficiency and profitability in a frontier market. Journal of Economic and Administrative Sciences, 36(4), 381–402. https://doi.org/10.1108/jeas-01-2019-0009
Falchetta, G., Michoud, B., Hafner, M., & Rother, M. (2022). Harnessing finance for a new era of decentralised electricity access: A review of private investment patterns and emerging business models. Energy Research & Social Science, 90(102587), 102587. https://doi.org/10.1016/j.erss.2022.102587
Fama, E. F., & French, K. R. (1999). The corporate cost of capital and the return on corporate investment. The Journal of Finance, 54(6), 1939–1967. https://doi.org/10.1111/0022-1082.00178
Gunawan, W. B. (2025). MSME Sustainability as the Key to Sustainability: Role and Contribution of MSMEs to Sustainability with a Bibliometric Approach and Literature Review. Equator Journal of Management and Entrepreneur, 13(1), 1–17. https://doi.org/10.26418/ejme.v13i1.89630
Houqe, M. N., Khan, H. Z., Moses, O., & Elias, A. (2024). Corporate reputation, cost of capital and the moderating role of economic development: international evidence. Meditari Accountancy Research, 32(4), 1106–1134. https://doi.org/10.1108/medar-03-2023-1951
Javaid, A., Nazir, M. S., & Fatima, K. (2023). Impact of corporate governance on capital structure: mediating role of cost of capital. Journal of Economic and Administrative Sciences, 39(4), 760–780. https://doi.org/10.1108/jeas-09-2020-0157
Judge, A., & Korzhenitskaya, A. (2021). Do credit ratings determine capital structure? International Journal of the Economics of Business, 1–30. https://doi.org/10.1080/13571516.2021.1961563
Kahtani, N. A., & Eraij, M. A. (2018). Does capital structure matter? Reflection on capital structure irrelevance theory: Modigliani-Miller theorem (MM 1958). International Journal of Financial Services Management, 9(1), 39. https://doi.org/10.1504/ijfsm.2018.089918
Kalash, I. (2023). The financial leverage–financial performance relationship in the emerging market of Turkey: the role of financial distress risk and currency crisis. EuroMed Journal of Business, 18(1), 1–20. https://doi.org/10.1108/emjb-04-2021-0056
Khan, K. I., Qadeer, F., Mata, M. N., Chavaglia Neto, J., Sabir, Q. ul A., Martins, J. N., & Filipe, J. A. (2021). Core predictors of debt specialization: A new insight to optimal capital structure. Mathematics, 9(9), 975. https://doi.org/10.3390/math9090975
Kruk, S. (2021). Impact of capital structure on corporate value—review of literature. Journal of Risk and Financial Management, 14(4), 155. https://doi.org/10.3390/jrfm14040155
Laghi, E., & Di Marcantonio, M. (2016). Beyond CAPM: estimating the cost of equity considering idiosyncratic risks. Quantitative Finance, 16(8), 1273–1296. https://doi.org/10.1080/14697688.2015.1124136
Mehzabin, S., Shahriar, A., Hoque, M. N., Wanke, P., & Azad, M. A. K. (2022). The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia. Asian Journal of Economics and Banking. https://doi.org/10.1108/ajeb-03-2022-0036
Mensah, L., Bein, M. A., & Arhinful, R. (2025). The impact of capital structure on business growth under IFRS adoption: Evidence from firms listed in the Frankfurt Stock Exchange. SAGE Open, 15(2). https://doi.org/10.1177/21582440251336533
Mudalige, H. M. N. K. (2023). The art of timing: Unpacking the market timing’s long -term impact on capital structure : With reference to listed companies in Colombo Stock Exchange. International Journal of Accounting and Business Finance, 9(2), 18–44. https://doi.org/10.4038/ijabf.v9i2.141
Nahar, P., & Chauhan, Y. (2025). Creditor rights, bank monitoring, and corporate risk-taking: evidence from creditor rights reform. Applied Economics, 1–21. https://doi.org/10.1080/00036846.2025.2497559
Nazir, M., Akbar, M., Akbar, A., Poulovo, P., Hussain, A., & Qureshi, M. A. (2022). The nexus between corporate environment, social, and governance performance and cost of capital: evidence from top global tech leaders. Environmental Science and Pollution Research International, 29(15), 22623–22636. https://doi.org/10.1007/s11356-021-17362-0
Nukala, V. B., & Prasada Rao, S. S. (2021). Role of debt-to-equity ratio in project investment valuation, assessing risk and return in capital markets. Future Business Journal, 7(1). https://doi.org/10.1186/s43093-021-00058-9
Rodríguez, R. A. (2024). A novel approach to calculate weighted average cost of capital (WACC) considering debt and firm’s cash flow durations. Managerial and Decision Economics: MDE, 45(2), 1154–1179. https://doi.org/10.1002/mde.4042
Singh, V. K., Singh, P., Karmakar, M., Leta, J., & Mayr, P. (2021). The journal coverage of Web of Science, Scopus and Dimensions: A comparative analysis. Scientometrics, 126(6), 5113–5142. https://doi.org/10.1007/s11192-021-03948-5
Tanjung, M. (2023). Cost of capital and firm performance of ESG companies: what can we infer from COVID-19 pandemic? Sustainability Accounting Management and Policy Journal, 14(6), 1242–1267. https://doi.org/10.1108/sampj-07-2022-0396
Tarulli, A., Morrone, D., Conte, D., Bussoli, C., & Russo, A. (2023). The relevance of non‐financial disclosure in influencing the cost of capital: Empirical evidence from the agri‐food sector. Business Strategy and the Environment, 32(4), 1739–1751. https://doi.org/10.1002/bse.3215
Upreti, V., Adams, M., & Jia, Y. (2022). Risk management and the cost of equity: evidence from the United Kingdom’s non-life insurance market. European Journal of Finance, 28(6), 551–570. https://doi.org/10.1080/1351847x.2021.1936588
Vartiainen, E., Masson, G., Breyer, C., Moser, D., & Román Medina, E. (2020). Impact of weighted average cost of capital, capital expenditure, and other parameters on future utility‐scale PV levelised cost of electricity. Progress in Photovoltaics, 28(6), 439–453. https://doi.org/10.1002/pip.3189
Yannelis, C., & Zhang, A. L. (2023). Competition and selection in credit markets. Journal of Financial Economics, 150(2), 103710. https://doi.org/10.1016/j.jfineco.2023.103710
Zopounidis, C., & Lemonakis, C. (2024). The company of the future: Integrating sustainability, growth, and profitability in contemporary business models. Development and Sustainability in Economics and Finance, 1(100003), 100003. https://doi.org/10.1016/j.dsef.2024.100003
Published
2025-08-05
How to Cite
GUNAWAN, William Ben.
Cost of Capital Revisited: Trends and Insights via Bibliometric Analysis and Literature Review.
Klabat Journal of Management, [S.l.], v. 6, n. 2, p. 135-150, aug. 2025.
ISSN 2722-726X.
Available at: <https://ejournal.unklab.ac.id/index.php/kjm/article/view/1322>. Date accessed: 13 oct. 2025.
doi: https://doi.org/10.60090/kjm.v6i2.1322.135-150.
Section
Articles
This work is licensed under a Creative Commons Attribution 4.0 International License.
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