Self-regulation in collaborative environments: the case of the equator principles in banking

J. Bos, Gabriela Contreras and Stefanie Kleimeier

No 7, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: Using banks in the syndicated lending market, we discuss a firm-specific strategy that has been overlooked by the literature, namely, that self-regulated firms pressure other non-self-regulated firms in an attempt to reduce effort asymmetries when collaborating. We develop a framework that shows when such a strategy is likely to be present. This framework is built on the view that the costs and benefits of collaboration are equally shared among self-regulated firms that collaborate. However, when self-regulated firms collaborate with non-self-regulated firms, the effort they exert differs and is not equally shared. In particular, we find that when firms collaborate, self-regulated firms pressure non-self-regulated firms to become self-regulated with the purpose of reducing effort asymmetries, and such a pressure increases with the duration of the collaboration.

Date: 2016-01-01
New Economics Papers: this item is included in nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2016007

DOI: 10.26481/umagsb.2016007

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