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Self-regulation in collaborative environments : the case of the equator principles in banking

Author

Listed:
  • Bos J.W.B.
  • Contreras M.G.
  • Kleimeier S.

    (GSBE)

Abstract

Using banks in the syndicated lending market, we discuss a firm-specific strategy that has been overlooked by the literature, namely, that self-regulated firms pressure other non-self-regulated firms in an attempt to reduce effort asymmetries when collaborating. We develop a framework that shows when such a strategy is likely to be present. This framework is built on the view that the costs and benefits of collaboration are equally shared among self-regulated firms that collaborate. However, when self-regulated firms collaborate with non-self-regulated firms, the effort they exert differs and is not equally shared. In particular, we find that when firms collaborate, self-regulated firms pressure non-self-regulated firms to become self-regulated with the purpose of reducing effort asymmetries, and such a pressure increases with the duration of the collaboration.

Suggested Citation

  • Bos J.W.B. & Contreras M.G. & Kleimeier S., 2016. "Self-regulation in collaborative environments : the case of the equator principles in banking," Research Memorandum 007, Maastricht University, Graduate School of Business and Economics (GSBE).
  • Handle: RePEc:unm:umagsb:2016007
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    File URL: https://cris.maastrichtuniversity.nl/portal/files/1366826/content
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    References listed on IDEAS

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    More about this item

    Keywords

    Banks; Depository Institutions; Micro Finance Institutions; Mortgages; Transactional Relationships; Contracts and Reputation; Networks;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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