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Green links: Corporate networks and environmental performance

Asgharian, Hossein LU ; Dzielinski, Michal ; Liu, Lu LU and Hashemzadeh, Zahra LU (2024) In Review of Finance 28(3). p.1027-1058
Abstract
We investigate the propagation of environmental performance among competitors and in customer–supplier relationships. We find causal effect among competitors, while the propagation from customers to suppliers and vice versa appears insignificant or does not survive identification tests. The effect is stronger among firms in highly concentrated competitor networks and towards firms with less market and bargaining power than their competitors. We also find significantly stronger propagation of environmental performance among competitors engaged in joint research and development activity. These results show that the propagation stems from both competitive pressure and technological spillover. Importantly, we find that propagation is strong... (More)
We investigate the propagation of environmental performance among competitors and in customer–supplier relationships. We find causal effect among competitors, while the propagation from customers to suppliers and vice versa appears insignificant or does not survive identification tests. The effect is stronger among firms in highly concentrated competitor networks and towards firms with less market and bargaining power than their competitors. We also find significantly stronger propagation of environmental performance among competitors engaged in joint research and development activity. These results show that the propagation stems from both competitive pressure and technological spillover. Importantly, we find that propagation is strong when the competitor improves its environmental performance and when the firm’s own environmental performance is poor initially, alleviating concerns that improvements in performance are concentrated among firms, which are already green. Overall, network effects among competing firms are a significant force shaping environmental performance, and a force mostly for good. (Less)
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author
; ; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Review of Finance
volume
28
issue
3
pages
54 pages
publisher
Oxford University Press
external identifiers
  • scopus:85191058918
ISSN
1572-3097
DOI
10.1093/rof/rfad042
language
English
LU publication?
yes
id
72cb44a5-bd0e-48b9-b417-bc87fc17781d
date added to LUP
2023-12-13 17:16:53
date last changed
2025-04-04 14:02:45
@article{72cb44a5-bd0e-48b9-b417-bc87fc17781d,
  abstract     = {{We investigate the propagation of environmental performance among competitors and in customer–supplier relationships. We find causal effect among competitors, while the propagation from customers to suppliers and vice versa appears insignificant or does not survive identification tests. The effect is stronger among firms in highly concentrated competitor networks and towards firms with less market and bargaining power than their competitors. We also find significantly stronger propagation of environmental performance among competitors engaged in joint research and development activity. These results show that the propagation stems from both competitive pressure and technological spillover. Importantly, we find that propagation is strong when the competitor improves its environmental performance and when the firm’s own environmental performance is poor initially, alleviating concerns that improvements in performance are concentrated among firms, which are already green. Overall, network effects among competing firms are a significant force shaping environmental performance, and a force mostly for good.}},
  author       = {{Asgharian, Hossein and Dzielinski, Michal and Liu, Lu and Hashemzadeh, Zahra}},
  issn         = {{1572-3097}},
  language     = {{eng}},
  number       = {{3}},
  pages        = {{1027--1058}},
  publisher    = {{Oxford University Press}},
  series       = {{Review of Finance}},
  title        = {{Green links: Corporate networks and environmental performance}},
  url          = {{http://dx.doi.org/10.1093/rof/rfad042}},
  doi          = {{10.1093/rof/rfad042}},
  volume       = {{28}},
  year         = {{2024}},
}