Green finance, loan commitment, and environmental corporate social responsibility in a differentiated duopoly
Kai Zhang,
Xubei Lian and
Leonard F. S. Wang
Managerial and Decision Economics, 2024, vol. 45, issue 1, 394-413
Abstract:
We analyze the firms' strategic choice of financing mode in both Cournot and Bertrand competition with pollution externalities. We show that, if the environmental corporate social responsibility (ECSR) firm does not abate, loan commitment financing will be used for ongoing dirty production, and the optimal interest rate is decreasing in the firm's ECSR concerns. However, when the ECSR firm voluntarily chooses a one‐shot abatement‐technology investment, the optimal choice is spot‐market financing. Compared with the case without abatement investment, the firm's finance for the green investment yields higher net consumer surplus and welfare unless the market size is sufficiently small.
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://doi.org/10.1002/mde.4005
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:45:y:2024:i:1:p:394-413
Access Statistics for this article
Managerial and Decision Economics is currently edited by Antony Dnes
More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().