How Have Green Companies Fared in Transactions with Banks? A Stakeholder‐Management Perspective

• Author: Liuling Liu,Jun Ma,Haizhi Wang,Desheng Yin,Dawei Jin
• DOI: http://doi.org/10.1111/jacf.12320
• Published date: 01 December 2018
• Date: 01 December 2018

IN THIS ISSUE:

Corporate

Governance

and Short-

Termism

8Are U.S. Companies Too Short-Term Oriented? Some oughts

Steven N. Kaplan, University of Chicago

19 Who Are the Short-Termists?

Wei Jiang, Columbia University

27 Corporate Short-Termism and How It Happens

Greg Milano, Fortuna Advisors

36 e Evolution of Corporate Cash

John R. Graham, Duke University and NBER, and Mark T. Leary, Washington University

in St. Louis and NBER

61 Do Staggered Boards Matter for Firm Value?

Yakov Amihud, New York University; Markus Schmid, University of St. Gallen;

and Steven Davidoff Solomon, University of California Berkeley

78 e Market Price of Managerial Indiscretions

Brandon N. Cline, Mississippi State University; Ralph A. Walkling, Drexel University;

and Adam S. Yore, University of Missouri

89 How Have Green Companies Fared in Transactions with Banks?

A Stakeholder-Management Perspective

Dawei Jin, Zhongnan University of Economics and Law; Liuling Liu, Bowling Green State

University; Jun Ma, Tsinghua University; Haizhi Wang, Illinois Institute of Technology;

and Desheng Yin, East China Normal University

VOLUME 30

NUMBER 4

FALL 2018

APPLIED

CORPORATE FINANCE

Journal of

89

Journal of Applied Corporate Finance • Volume 30 Number 4 Fall 2018

M

ere is no shortage of studies that have attempted to iden-

tify the linkage between environmental management and

rm performance. But the ndings to date have been mixed:

whereas some works conrm a positive relationship,¹ others

have been unable to identify a positive eect of environmental

proactivity on corporate nancial performance.² Nevertheless,

*Corresponding author. Please send all correspondences to dsyin@nance.ecnu.edu.

cn.

1 See, for example, Judge and Douglas (1998), King and Lenox (2002) and Melnyk

et al. (2003). Full citations of all studies are provided in the references at the end of the

article.

2 Gilley et al. (2000); Link and Naveh (2006).

two important issues remain that call for more inclusive anal-

yses of stakeholder relations. First, most research along this

line focuses on the relationship between shareholders and one

particular type of nonshareholder stakeholder, which limits our

understanding of the dynamic interactions among various non-

shareholder stakeholders. Second, if the greening of corporate

strategies is an attempt to meet certain stakeholders’ expecta-

tions, then properly identifying the salient stakeholders in the

process becomes a critical step for corporate strategy formation.

In this study, we attempt to ll a void in the literature

by shedding further light on environmental management in

particular and stakeholder relations in general. Building on

by Dawei Jin, Zhongnan University of Economics and Law; Liuling Liu, Bowling Green State University; Jun Ma,

Tsinghua University; Haizhi Wang, Illinois Institute of Technology; and Desheng Yin*, East China Normal University

ost large companies devote substantial time and resources to environmental

management (“green management”) or, more broadly speaking, environmen-

tal social responsibility. Many companies choose to engage in green management in ways

that go well beyond regulatory and legal requirements. Moreover, companies face growing

pressure from various key stakeholders, including creditors, suppliers, customers, and the

government to reduce their negative impacts on society and the natural environment. And

to the extent that the management of stakeholder concerns ends up affecting a company’s

long-run efciency and value, managers’ commitment to the environment to ensure sustain-

able economic success has thus become a strategic issue. Including environmental issues

in corporate strategies can improve a rm’s alignment with growing environmental concerns

and the expectations of its stakeholders. But if most stakeholder groups applaud environ-

mental investments by industrial rms, the challenge for business managers is to discover

the ways and circumstances in which green management is appealing and benecial to both

shareholders and other stakeholder groups.

How Have Green Companies Fared in Transactions

with Banks? A Stakeholder-Management Perspective