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- Title
Green links: corporate networks and environmental performance.
- Authors
Asgharian, Hossein; Dzieliński, Michał; Hashemzadeh, Zahra; Liu, Lu
- Abstract
We investigate the propagation of environmental performance among competitors and in customer–supplier relationships. We find a significant causal effect among competitors, while the propagation from customers to suppliers and vice versa appears insignificant or does not survive identification tests. The effect is stronger among firms in highly concentrated competitor networks and toward firms with less market and bargaining power than their competitors. We also find significantly stronger propagation of environmental performance among competitors engaged in joint research and development activity. These results show that the propagation stems from both competitive pressure and technological spillover. Importantly, we find that propagation is strong when the competitor improves its environmental performance and when the firm's own environmental performance is poor initially, alleviating concerns that improvements in performance are concentrated among firms, which are already green. Overall, network effects among competing firms are a significant force shaping environmental performance, and a force mostly for good.
- Subjects
NETWORK performance; CORPORATE sustainability; BARGAINING power; MARKET power; ELECTRICITY markets; CONSUMERS
- Publication
Review of Finance, 2024, Vol 28, Issue 3, p1027
- ISSN
1572-3097
- Publication type
Article
- DOI
10.1093/rof/rfad042