Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs

Nirosha Wellalage (), Vijay Kumar, Ahmed Hunjra () and Mamdouh Abdulaziz Sa Al-Faryan

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: The COVID-19 pandemic has resulted in substantial constraints for small and medium enterprises (SMEs) worldwide. The techniques in which SMEs handle recent crises and the degree to which environmental performance is advantageous when the marketplace experiences an adverse shock is fairly untouched in the literature. To assess this probability, we examine, using data from 6,597 SMEs in 13 developing countries, the effect of firm environmental efficiency on firm financing during the COVID-19 outbreak. We consider three aspects of external financing – bank, non-bank and trade credit – and suggest that it pays for firms to show devotion to environmental obligations in a global pandemic. Our research implies that the trust between a firm and its stakeholders, if it is based on environmental performance, pays off during periods of shock and adversity.

Keywords: COVID-19; Small and medium enterprises (SMEs); Environmental performance; Firm financing; Environmental regulations (search for similar items in EconPapers)
JEL-codes: F64 G01 G21 Q14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005213

DOI: 10.1016/j.frl.2021.102568

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