Affiliation:
1. School of Business Luoyang Normal University Luoyang China
2. School of Business Henan University of Science and Technology Luoyang China
3. Wenlan School of Business Zhongnan University of Economics and Law Wuhan China
Abstract
AbstractWe analyze the firms' strategic choice of financing mode in both Cournot and Bertrand competition with pollution externalities. We show that, if the environmental corporate social responsibility (ECSR) firm does not abate, loan commitment financing will be used for ongoing dirty production, and the optimal interest rate is decreasing in the firm's ECSR concerns. However, when the ECSR firm voluntarily chooses a one‐shot abatement‐technology investment, the optimal choice is spot‐market financing. Compared with the case without abatement investment, the firm's finance for the green investment yields higher net consumer surplus and welfare unless the market size is sufficiently small.
Subject
Management of Technology and Innovation,Management Science and Operations Research,Strategy and Management,Business and International Management
Cited by
2 articles.
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