Do Lenders Applaud Corporate Environmental Performance? Evidence from Chinese Private-Owned Firms
This study extends previous literature on the association between corporate social responsibility and corporate financial behavior by investigating the influence of corporate environmental performance on the cost of debt. Using a sample of Chinese private-owned firms, we document strong and consiste...
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| Veröffentlicht in: | Journal of business ethics 2017-06, Vol.143 (1), p.179-207 |
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| container_title | Journal of business ethics |
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| creator | Du, Xingqiang Weng, Jianying Zeng, Quan Chang, Yingying Pei, Hongmei |
| description | This study extends previous literature on the association between corporate social responsibility and corporate financial behavior by investigating the influence of corporate environmental performance on the cost of debt. Using a sample of Chinese private-owned firms, we document strong and consistent evidence to show that corporate environmental performance is significantly negatively associated with the interest rate on debt—the proxy for the cost of debt. The findings suggest that lenders applaud better environmental performance. Moreover, internal control attenuates the negative association between corporate environmental performance and the interest rate on debt, implying substitutive effects between corporate environmental performance and internal control on the reduction of interest rates on debt. The results are robust to various sensitivity tests and are still valid after controlling for the potential endogeneity between corporate environmental performance and the interest rate on debt. |
| doi_str_mv | 10.1007/s10551-015-2758-2 |
| format | Article |
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Evidence from Chinese Private-Owned Firms</title><source>JSTOR Archive Collection A-Z Listing</source><source>Education Source</source><source>Springer Online Journals Complete</source><source>PAIS Index</source><source>Business Source Complete</source><creator>Du, Xingqiang ; Weng, Jianying ; Zeng, Quan ; Chang, Yingying ; Pei, Hongmei</creator><creatorcontrib>Du, Xingqiang ; Weng, Jianying ; Zeng, Quan ; Chang, Yingying ; Pei, Hongmei</creatorcontrib><description>This study extends previous literature on the association between corporate social responsibility and corporate financial behavior by investigating the influence of corporate environmental performance on the cost of debt. Using a sample of Chinese private-owned firms, we document strong and consistent evidence to show that corporate environmental performance is significantly negatively associated with the interest rate on debt—the proxy for the cost of debt. The findings suggest that lenders applaud better environmental performance. Moreover, internal control attenuates the negative association between corporate environmental performance and the interest rate on debt, implying substitutive effects between corporate environmental performance and internal control on the reduction of interest rates on debt. The results are robust to various sensitivity tests and are still valid after controlling for the potential endogeneity between corporate environmental performance and the interest rate on debt.</description><identifier>ISSN: 0167-4544</identifier><identifier>EISSN: 1573-0697</identifier><identifier>DOI: 10.1007/s10551-015-2758-2</identifier><language>eng</language><publisher>Dordrecht: Springer</publisher><subject>Business and Management ; Business Ethics ; Companies ; Corporate responsibility ; Debt ; Education ; Environmental ethics ; Environmental management ; Environmental performance ; Ethics ; Green marketing ; Interest rates ; Lenders ; Management ; Philosophy ; Private sector ; Quality of Life Research ; Social responsibility ; Studies</subject><ispartof>Journal of business ethics, 2017-06, Vol.143 (1), p.179-207</ispartof><rights>Springer Science+Business Media Dordrecht 2017</rights><rights>Springer Science+Business Media Dordrecht 2015</rights><rights>Journal of Business Ethics is a copyright of Springer, 2017.</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c370t-d8e1abcf351be9bc919e5fd84d514885cff25ec40776bc36ac14c9655b5246903</citedby><cites>FETCH-LOGICAL-c370t-d8e1abcf351be9bc919e5fd84d514885cff25ec40776bc36ac14c9655b5246903</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.jstor.org/stable/pdf/44253105$$EPDF$$P50$$Gjstor$$H</linktopdf><linktohtml>$$Uhttps://www.jstor.org/stable/44253105$$EHTML$$P50$$Gjstor$$H</linktohtml><link.rule.ids>314,776,780,799,27843,27901,27902,41464,42533,51294,57992,58225</link.rule.ids></links><search><creatorcontrib>Du, Xingqiang</creatorcontrib><creatorcontrib>Weng, Jianying</creatorcontrib><creatorcontrib>Zeng, Quan</creatorcontrib><creatorcontrib>Chang, Yingying</creatorcontrib><creatorcontrib>Pei, Hongmei</creatorcontrib><title>Do Lenders Applaud Corporate Environmental Performance? 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| source | JSTOR Archive Collection A-Z Listing; Education Source; Springer Online Journals Complete; PAIS Index; Business Source Complete |
| subjects | Business and Management Business Ethics Companies Corporate responsibility Debt Education Environmental ethics Environmental management Environmental performance Ethics Green marketing Interest rates Lenders Management Philosophy Private sector Quality of Life Research Social responsibility Studies |
| title | Do Lenders Applaud Corporate Environmental Performance? Evidence from Chinese Private-Owned Firms |
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