Finance Faculty Publications and Presentations
Document Type
Article
Publication Date
5-2022
Abstract
We examine the effect of related party transactions on corporate environmental responsibility and find that firms with more related party transactions tend to have more controversial environmental reports, less emissions reduction, and less environmental expenditures. This relationship is more significant for firms with a high investment-cash flow sensitivity and those with a low ESG score. Overall, the results corroborate the hypothesis that the marginal costs of corporate environmental responsibility outweigh the benefits for financially constrained firms, thus deterring these firms from engaging in corporate environmental responsibility activities.
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Publication Title
Finance Research Letters
Recommended Citation
Choi, W., Chung, C.Y., Rabarison, M.K. and Wang, K., 2022. Related party transactions and corporate environmental responsibility. Finance Research Letters, 46, p.102490. https://doi.org/10.1016/j.frl.2021.102490
Comments
Original published version available at https://doi.org/10.1016/j.frl.2021.102490