- Published
- 2021-11-17
- Venue
- Review of Financial Studies, vol. 35, no. 7, pp. 3373-3417
- Cited by
- 555
- Open access
- Yes, green
- DOI
- 10.1093/rfs/hhab125
Abstract
We show that banking relationships promote corporate environmental, social, and governance (ESG) policies. Specifically, banks are more likely to grant loans to borrowers with ESG profiles similar to their own and positively influence the borrower’s subsequent ESG performance. Their influence is more pronounced when (1) banks have significantly better ESG ratings than borrowers and (2) borrowers are bank dependent. We exploit M&A among lenders as a source of quasi-exogenous variation in the lender’s ESG standard to alleviate endogeneity concerns. Overall, our study presents the first evidence on the interplay between responsible bank lending and borrowers’ ESG behavior.
Cite this paper
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- APA 7
Houston, J. F., & Shan, H. (2021). Corporate ESG Profiles and Banking Relationships. Review of Financial Studies, 35(7), 3373–3417. https://doi.org/10.1093/rfs/hhab125
- MLA 9
Houston, Joel F., and Hongyu Shan. "Corporate ESG Profiles and Banking Relationships." Review of Financial Studies, vol. 35, no. 7, 2021, pp. 3373–3417, https://doi.org/10.1093/rfs/hhab125.
- Chicago
Houston, Joel F., and Hongyu Shan. "Corporate ESG Profiles and Banking Relationships." Review of Financial Studies 35, no. 7 (2021): 3373–3417. https://doi.org/10.1093/rfs/hhab125.
- GOST
Houston J. F., Shan H. Corporate ESG Profiles and Banking Relationships // Review of Financial Studies. — 2021. — Vol. 35, № 7. — P. 3373–3417. — URL: https://doi.org/10.1093/rfs/hhab125
- BibTeX
@article{houston2021corporate, title = {{Corporate ESG Profiles and Banking Relationships}}, author = {Joel F. Houston and Hongyu Shan}, journal = {Review of Financial Studies}, year = {2021}, volume = {35}, number = {7}, pages = {3373--3417}, doi = {10.1093/rfs/hhab125}, url = {https://doi.org/10.1093/rfs/hhab125} }- RIS
TY - JOUR AU - Houston, Joel F. AU - Shan, Hongyu TI - Corporate ESG Profiles and Banking Relationships JO - Review of Financial Studies VL - 35 IS - 7 SP - 3373 EP - 3417 PY - 2021 DA - 2021/11/17 DO - 10.1093/rfs/hhab125 UR - https://doi.org/10.1093/rfs/hhab125 ER -