Goetz (2018)

Goetz, Martin. “Financial constraints and environmental corporate social responsibility.” Working paper (Goethe University), 2018.

From the author’s abstract: “This paper identifies the effect of financial constraints on firms’ engagement in corporate social responsibility (CSR), particularly firms’ focus on reducing toxic emissions. Exploiting heterogeneity in firms’ exposure to a monetary policy shock in the U.S., which reduced financial constraints for some firms, I find that affected firms increase their focus on reducing emissions. Analyzying plant-level data on the release of toxic chemicals, I find that plants only reduce toxic emissions if their parents experience a reduction in financial constraints due to the monetary policy shock…. These findings are consistent with the idea that a reduction in financial constraints reduces pollution.”