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ESG, the 2008 global financial crisis and access to external finance by Canadian firms
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Abstract |
Abstract
This study examines the impact of restricted access to credit on the Environmental, Social, and
Governance (ESG) performance of Canadian firms, using the 2008 financial crisis as a stress
test. The analysis is guided by two competing perspectives: the Resource Constraint View and
the Strategic Value View. I employ the Difference-in-Differences (DiD) methodology to assess
how financial constraints resulting from the crisis influenced ESG performance.
My findings reveal a significant negative impact on the Environmental pillar, confirming that
financial constraints led firms to deprioritise environmental commitments. However, the
effects on the combined ESG score, as well as the Social and Governance pillars, are less
robust, indicating that the relationship between credit access and these dimensions is more
complex. These results align with the Resource Constraint View, suggesting that firms
prioritise financial stability over sustainability commitments during periods of economic
distress.
Further analysis shows that Return on Assets is positively associated with ESG and Social
performance, indicating that financially healthier firms are better able to maintain sustainability
efforts. Firm Size is positively correlated with all ESG dimensions, highlighting that larger
firms are more capable of investing in ESG initiatives. Additionally, the presence of an Audit
Board Committee is strongly linked to higher Governance scores, underscoring the role of
effective oversight in fostering strong ESG performance.
This study emphasises the critical role of access to external credit in shaping ESG outcomes,
particularly in the environmental domain during economic downturns. The findings highlight
the need for supportive financial environments to sustain corporate sustainability efforts. |
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Persons |
Persons
Author (aut): Teye-Ali, Gabriel
Thesis advisor (ths): Freylejer, Leandro
Degree committee member (dgc): Fu, Chengbo
Degree committee member (dgc): Avoumatsodo, Komla
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Degree Name
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Department |
Department
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DOI |
DOI
https://doi.org/10.24124/2025/30520
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Collection(s)
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Degree granting institution (dgg): University of Northern British Columbia. Business Administration
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Extent
1 online resource (ix, 111 pages)
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Digital Origin
born digital
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Genre
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Access Conditions
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Restriction on Access |
Restriction on Access
Author
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Rights Statement |
Rights Statement
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Use License |
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Document
Language |
English
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Name |
ESG, the 2008 global financial crisis and access to external finance by Canadian firms
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application/pdf
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1179171
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