Examining the Association between Environmental Performance and the Company’s Ability to Access Bank Credit: Evidence from Egyptian Companies

نوع المستند : المقالة الأصلية

المؤلفون

1 كلية التجارة- جامعة القاهرة

2 كلية التجارة - جامعة القاهرة

المستخلص

With Egypt’s economy serving as a model for developing countries, this study investigates the relationship between environmental performance and a company’s ability to obtain bank loans. For the period from 2013 - 2022, an empirical analysis is applied to the Egyptian listed companies. The importance of this issue is consistent with Egypt’s vision 2020-2030. Go green initiative started in Egypt in 2022.
Therefore, a compelling area for studying will be how environmental performance influences a company's ability to obtain bank loans in developing nations, given the lack of consensus evident in earlier studies about this relationship in terms of being linear or non-linear and the characteristics of countries, whether developed or developing.
The weighted least squares model was used as a base for the investigation. The statistical analyses’ findings revealed that environmental performance positively affects the company’s access to bank credit, and this is theoretically consistent with stakeholder theory and signaling theory. The positive correlation between environmental performance and bank credit demonstrates how the Egyptian listed companies value their contribution to environmental protection and use banks that reward environmentally friendly businesses to get the financing they require. It also shows the extent of the effort made by Egypt in general and the Central Bank of Egypt in particular in seeking to implement the green credit policy, which comes within Egypt's strategic plan to transform towards a green economy in the Middle East.

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