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Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs

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  • Wellalage, Nirosha Hewa
  • Kumar, Vijay
  • Hunjra, Ahmed Imran
  • Al-Faryan, Mamdouh Abdulaziz Saleh

Abstract

The COVID-19 pandemic has resulted in substantial constraints for small and medium enterprises (SMEs) worldwide. The techniques in which SMEs handle recent crises and the degree to which environmental performance is advantageous when the marketplace experiences an adverse shock is fairly untouched in the literature. To assess this probability, we examine, using data from 6,597 SMEs in 13 developing countries, the effect of firm environmental efficiency on firm financing during the COVID-19 outbreak. We consider three aspects of external financing – bank, non-bank and trade credit – and suggest that it pays for firms to show devotion to environmental obligations in a global pandemic. Our research implies that the trust between a firm and its stakeholders, if it is based on environmental performance, pays off during periods of shock and adversity.

Suggested Citation

  • Wellalage, Nirosha Hewa & Kumar, Vijay & Hunjra, Ahmed Imran & Al-Faryan, Mamdouh Abdulaziz Saleh, 2022. "Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs," Finance Research Letters, Elsevier, vol. 47(PA).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005213
    DOI: 10.1016/j.frl.2021.102568
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    References listed on IDEAS

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    More about this item

    Keywords

    COVID-19; Small and medium enterprises (SMEs); Environmental performance; Firm financing; Environmental regulations;
    All these keywords.

    JEL classification:

    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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