IDEAS home Printed from https://ideas.repec.org/a/wsi/tijaxx/v56y2021i02ns1094406021500074.html
   My bibliography  Save this article

Environmental Performance of Firms and Access to Bank Loans

Author

Listed:
  • Hongtao Shen

    (Department of Accounting, Research Center of Low Carbon Economy for Guangzhou Region, Jinan University, Guangzhou, Guangdong 510632, P. R. China)

  • Huiying Wu

    (School of Business, Western Sydney University, Penrith, NSW 2751, Australia)

  • Wenbin Long

    (School of Accounting, Guangdong University of Foreign Studies, Guangzhou, Guangdong 510006, P. R. China)

  • Le Luo

    (Macquarie Business School, Macquarie University, Sydney, NSW 2109, Australia)

Abstract

This study examines whether better environmental performance of a firm facilitates its access to bank loans in China and how state ownership and regional environmental pollution moderate this relationship. Using a sample of Chinese firms listed on the Shanghai or Shenzhen stock exchanges from 2007 to 2015, we find that better environmental performance is associated with greater access to bank loans, which is consistent with the predictions of risk-management theory. Furthermore, we find that the relationship between environmental performance and access to bank loans is weakened for state-owned firms and strengthened for firms operating in the regions with higher environmental pollution, suggesting that institutional factors play an important role when banks make lending decisions. Our results have implications for managers, policymakers, and banks in the transition to a green economy.

Suggested Citation

  • Hongtao Shen & Huiying Wu & Wenbin Long & Le Luo, 2021. "Environmental Performance of Firms and Access to Bank Loans," The International Journal of Accounting (TIJA), World Scientific Publishing Co. Pte. Ltd., vol. 56(02), pages 1-37, June.
    • Handle: RePEc:wsi:tijaxx:v:56:y:2021:i:02:n:s1094406021500074
    DOI: 10.1142/S1094406021500074
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S1094406021500074
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S1094406021500074?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Richard M. Crossley & Mohamed H. Elmagrhi & Collins G. Ntim, 2021. "Sustainability and legitimacy theory: The case of sustainable social and environmental practices of small and medium‐sized enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3740-3762, December.
    2. Shen, Hongtao & Yang, Qing & Luo, Le & Huang, Nan, 2023. "Market reactions to a cross-border carbon policy: Evidence from listed Chinese companies," The British Accounting Review, Elsevier, vol. 55(1).
    3. Qiang Li & Wenjuan Ruan & Huimin Shi & Erwei Xiang & Feida (Frank) Zhang, 2022. "Corporate environmental information disclosure and bank financing: Moderating effect of formal and informal institutions," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 2931-2946, November.
    4. Baohua Liu & Junfeng Wu & Kam C. Chan, 2021. "Does air pollution change a firm's business strategy for employing capital and labor?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3671-3685, December.
    5. Wu, Xiting & Luo, Le & You, Jiaxing, 2023. "Actions speak louder than words: Environmental law enforcement externalities and access to bank loans," Journal of Banking & Finance, Elsevier, vol. 153(C).
    6. Wenbin Long & Le Luo & Hongfeng Sun & Qiqi Zhong, 2023. "Does going abroad lead to going green? Firm outward foreign direct investment and domestic environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 484-498, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:tijaxx:v:56:y:2021:i:02:n:s1094406021500074. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: https://www.worldscientific.com/worldscinet/tija .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.