The Relationship between Corporate Environmental Performance and Suppliers' Credit Lending

Witness Siwela and Collins C. Ngwakwe
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Witness Siwela: University of South Africa, Pretoria, South Africa
Collins C. Ngwakwe: University of Limpopo, Polokwane, South Africa

Oblik i finansi, 2024, issue 1, 66-83

Abstract: Green supply chain management has gained traction in contemporary times against many environmental catastrophes and scandals involving prominent companies. Despite the strides made by lawmakers to address such challenges, an increasing number of corporations overlook environmental issues such as global warming, ecological concerns, reverse logistics, and global energy. Notwithstanding the contributions in prior studies, to the best of researchers' knowledge, no study has sought to link corporate environmental performance with suppliers' credit lending practices. Yet policymakers seek to develop regulations that incorporate the understanding of the collaboration among the supply chain members. Thus, we seek to establish the short-run and long-run dynamics between corporate environmental performance and suppliers' credit lending. Targeting companies listed in the FTSE/JSE RII, we draw a sample of 21 companies using a judgemental sampling technique. Furthermore, archival data were collected to compute a short panel data set. The panel data set for statistical analysis comprised 21 cross-sections over six years, totalling 126 observations. The study adopted the first differenced econometric models in data analyses, namely Panel Vector Error Correction Model (VECM) and, subsequently, Panel Least Squares (PLS), Wald Test, and Impulse Response Functions (IRF). Findings indicated a statistically significant positive relationship exists in the long run between corporate environmental performance and suppliers' credit lending. Conversely, the same endogenous variables produced a statistically significant negative relationship in the short run. The study contributes new insights to supply chain management literature and renders novel policy implications for lawmakers.

Keywords: environmental performance; supply chain; stakeholders; credit lending; supply chain member (search for similar items in EconPapers)
JEL-codes: G30 G40 O44 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:iaf:journl:y:2024:i:1:p:66-83

DOI: 10.33146/2307-9878-2024-1(103)-66-83

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