What is it about?
The findings indicate that bank incorporates firms‘ environment consciousness in their corporate lending decision.
Featured Image
Why is it important?
We establish that more eco-friendly firm, defined as a firm with higher environment score in the study, gets favorable loan contract than the firms with lower environment score. By considering firms‘ environment-consciousness in determining loan contract, banks can reduce their default risk. In addition, the other stakeholders of the business can also get benefits. The social implication of the study is also noteworthy. To get a favorable loan contract if firms become more environment- conscious, it will in turn benefit the whole society.
Perspectives
The corporate social responsibility, such as eco-consciousness, can also be a determinant of cost of bank debt, which provides new insight to the policy makers and academicians.
Dr Suman Lodh
Middlesex University
Read the Original
This page is a summary of: Do banks value the eco-friendliness of firms in their corporate lending decision? Some empirical evidence, International Review of Financial Analysis, December 2012, Elsevier,
DOI: 10.1016/j.irfa.2012.06.008.
You can read the full text:
Contributors
The following have contributed to this page
