One of the crucial challenges in energy management is the conversion to sustainable operations. The present work is an attempt to verify whether financial institutions are able to identify and valorize those energy companies that have embarked on a virtuous process of emissions reduction. The analysis aims to verify the extent to which environmental disclosure measures are negatively associated with the cost of debt, focusing on a sample of international energy enterprises, observed over a time span from 2003 to 2016. Moreover, it tests whether measures relating to the emission of GHG are positively associated with the cost of debt. The empirical analysis is
PurposeThis study intends to test the relationship between banks’ board diversity, detected with age and gender characteristics, and banks’ social performance. The resource dependence theory posits that board diversity is a strategic tool able to enrich the board of directors by expanding skills and the number of links with stakeholders, which have a strategic role in achieving a competitive advantage and sustainable goals, especially in the banking sector.Design/methodology/approachThe research hypotheses are tested using a sample of 46 European banks observed from 2009 to 2017. The gender and age diversity data of bank board members are hand-collected from banks’ social reports.FindingsThe empirical results show that bank social performance is positively influenced by board gender and age diversity. Thus, the human capital determined by a higher bank’s board diversity constitutes an essential resource for adopting more sustainable business models.Originality/valueThis paper analyses the association between board diversity and social performance, providing empirical evidence for the European banking sector in the period after the 2008 global financial crisis. The banking literature provides scarce evidence on the topic; however, the empirical results claim the strategic importance of the appointment of directors to the banks’ boards to balance corporate strategy with social and environmental issues generating a positive impact on sustainable growth.
PurposeThe purpose of this paper is to verify whether the benefits gained by granting extended payment terms can lead to higher profitability for Italian companies. Moreover, the analysis aims to investigate whether trade credit offered at a higher level than the sector average can contribute to the profitability of companies. Finally, it aims to test whether the profitability connected to granting trade credit is higher for the unconstrained and financially sound companies.Design/methodology/approachThe empirical analyses are conducted on a sample of Italian firms, over the period 2008–2016. The methodologies used to test research hypotheses are panel analysis with fixed effects and random effects models, as well as the generalized method of moment (GMM).FindingsThe results show the contribution of trade credit to the profitability of Italian companies. The empirical analysis also suggests that companies might improve their profitability by increasing investments in trade receivables to a greater extent than companies in their business sector. Finally, the greater use of payables to suppliers and the higher incidence of bank debt reduce the contribution of accounts receivable to the profitability of companies.Originality/valueThis study contributes to the existing literature as very few studies have analyzed whether trade credit offered at a higher level than the sector average may contribute to the profitability of companies. Moreover, the study provides new evidence on the moderation effect of payables to banks and suppliers on the contribution of granting trade credit to company performance.
This paper aims to explore the relationship between the economic, environmental, social, and corporate governance component of Corporate Social Performance (CSP) and the Corporate Financial Performance (CFP) in the European banking sector. The empirical analyses, based on panel data, are performed on a sample of 70 listed European banks (EU28) over the period 2011-2015. The main results show a significant and positive relationship between the aggregated CSP measure and the average profitability of banks' assets and market capitalization. Furthermore, the social component positively affects the average return on assets and equity; the economic component is positively associated with the performance of prospective profitability and market capitalization; finally, the environmental component is positively associated with the ROAA. Sustainable banks, in line with the stakeholder Theory, through ethical and social policies, might increase their financial and economic performance.
The growing sensitivity of stakeholders towards health, food safety and environmental protection has pushed agri-food companies to embrace a new way of doing business, making huge investments to reduce their impact on ecosystem. However, these efforts would be in vain if not properly communicated, especially to financial institutions and investors, as they are the fundamental and supportive stakeholders.Through non-financial disclosure, indeed, this greater transparency would translate into benefits, such as creditworthiness, lower risks and costs of capital. From these considerations, this study aims at verifying to what extent the implementation of sustainability strategies can affect the overall cost of capital, observed in its dual form: debt and equity. In particular, through panel data analyses, it tested how nonfinancial disclosure-measured by Bloomberg's disclosure scores-could influence the cost of capital of a sample of 73 international agricultural firms observed from 2015 to 2019. The results showed a significant and negative relationship, suggesting that a higher level of disclosure could be effective in lowering firms' financial burden. This study contributes to the literature on non-financial disclosure and cost of capital as it studies this phenomenon in a sector in which previous research is limited.
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