Government certified environmental labels and trade credit: Evidence from green factories

Government certified environmental labels and trade credit: Evidence from green factories

•Green factory certification enhances firms’ trade credit access.•This effect is notably pronounced in highly monopolized or low reputation markets.•Certification reducing earnings management and enhancing analyst attention.•We highlight green premiums’ impact on trade credit outcomes. Using novel d...

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Bibliographic Details
Published in:Economics letters Vol. 244; p. 112008
Main Authors: Li, Panni, Yao, Shouyu, Fan, Lin, Yin, Shihao, Du, Huibin
Format: Journal Article
Language:English
Published: Elsevier B.V 01-11-2024
Subjects:
Government certification
Green factory
Information asymmetry
Trade credit
Trade credit
Q2
Green factory
Information asymmetry
G3
Government certification
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Description
Summary:•Green factory certification enhances firms’ trade credit access.•This effect is notably pronounced in highly monopolized or low reputation markets.•Certification reducing earnings management and enhancing analyst attention.•We highlight green premiums’ impact on trade credit outcomes. Using novel data from a manually collected green factory list, our results show government-certified labels significantly enhance trade credits by reducing information asymmetry. Heterogeneity analysis reveals stronger effects in highly monopolized, low-reputation markets, where green certification provides a competitive advantage.
ISSN:0165-1765
DOI:10.1016/j.econlet.2024.112008