Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191619
Authors: 
Götz, Martin
Year of Publication: 
2018
Series/Report no.: 
SAFE Working Paper 241
Abstract: 
This paper analyzes the effect of financial constraints on firms' corporate social responsibility. Exploiting heterogeneity in firms' exposure to a monetary policy shock in the U.S., which reduced financial constraints for some firms, I find that firms increase their environmental responsibility. I use facility-level data to account for unobservable time-varying influences on pollution and find that toxic emissions decrease when parent companies are more exposed to the monetary policy shock. I further find that these facilities are also more likely to implement pollution abatement activities. Examining within-parent company heterogeneity I find that pollution abatement investments center on facilities at greater risk of facing additional costs due to environmental regulation. The findings are consistent with the idea that a reduction in financial constraints reduces pollution as it allows firms to implement pollution abatement measures.
Subjects: 
Corporate Social Responsibility
Emissions
Financial Constraints
Pollution
Bond Markets
JEL: 
G32
E52
Q52
Q53
Persistent Identifier of the first edition: 
Document Type: 
Working Paper
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