Bank agglomeration and corporate environmental responsibility performance: Evidence from Chinese bank branch data

Weijie Tan, Minghao Shen, Yubiao Pang and Yiqian Liu

International Review of Financial Analysis, 2024, vol. 91, issue C

Abstract: While corporate environmental responsibility (CER) has attracted widespread attention in recent years, there is still very little understanding as regards whether bank agglomeration affects CER practices. This study has measured the agglomeration of bank branches around Chinese listed enterprises from 2011 to 2020 using Python and the Baidu Map API. For the first time, the study has revealed that, bank agglomeration can have a positive impact on CER practices by reducing financial constraints on enterprises and fostering green business practices. This impact is more significant for private enterprises, enterprises with high costs of equity, enterprises in non-pollution-intensive industries, and enterprises in highly marketized regions. CER performance can be better enhanced by the clustering of state-owned, local, and foreign bank branches around enterprises. In addition, the entry and exit of bank branches can improve CER performance as it can foster the effective allocation of financial resources, and this effect is more evident for private enterprises. To conclude, this study has evaluated the value of bank branch evolution for the environment and society of emerging countries.

Keywords: Bank agglomeration; Corporate environmental responsibility; Financial constraints; Green practices (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:91:y:2024:i:c:s1057521923005379

DOI: 10.1016/j.irfa.2023.103021

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