Top

Published in:

2023 | OriginalPaper | Chapter

1. Introduction

Authors : Egidio Palmieri, Enrico Fioravante Geretto

Published in: Adapting to Change

Publisher: Springer Nature Switzerland

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

This chapter serves as an introduction to the study of alternative finance tools, their risks and opportunities for firms, and their interaction with Environmental, Social, and Governance (ESG) factors in finance. The chapter begins by defining alternative finance and describing its various tools. It examines the opportunities these tools offer to firms, as well as the associated risks. The focus then shifts to how ESG factors are assessed in finance, discussing the determinants of ESG scores and their impact on firm risk, profitability, and value. The chapter also explores the evolving relationships between banks and firms in the context of alternative finance and ESG practices, highlighting how these factors are changing traditional financial relationships. Finally, the chapter outlines the research objectives, setting the stage for a deeper exploration of these themes. It concludes by providing a structured overview of the monograph, detailing the focus and content of the subsequent chapters. This layout effectively sets the tone for a thorough investigation into the intricate interplay between bank-firm relationships, ESG factors, and alternative finance in the modern financial landscape.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

next chapter The Determinants of Bank-Firm Relationships: Overview, Evolution, and Challenges

Agrawal, A., Catalini, C., & Goldfarb, A. (2014). Some simple economics of crowdfunding. Innovation Policy and the Economy, 14(1), 63–97.CrossRef

Allen, F., Carletti, E., & Gu, X. (2008). The roles of banks in financial systems. Oxford handbook of banking, 32–57.

Ameer, R., & Othman, R. (2012). Sustainability practices and corporate financial performance: A study based on the top global corporations. Journal of Business Ethics, 108, 61–79.CrossRef

Artiach, T., Lee, D., Nelson, D., & Walker, J. (2010). The determinants of corporate sustainability performance. Accounting & Finance, 50(1), 31–51.CrossRef

Atif, M., & Ali, S. (2021). Environmental, social and governance disclosure and default risk. Business Strategy and the Environment, 30(8), 3937–3959.CrossRef

Auboin, M., & Engemann, M. (2014). Testing the trade credit and trade link: Evidence from data on export credit insurance. Review of World Economics, 150, 715–743.CrossRef

Baltas, K., Fiordelisi, F., & Mare, D. S. (2022). Alternative finance after natural disasters. British Journal of Management, 33(1), 117–137.CrossRef

Barnea, A., & Rubin, A. (2010). Corporate social responsibility as a conflict between shareholders. Journal of Business Ethics, 97, 71–86.CrossRef

Bassen, A., & Senkl, D. (2011). ESG-environmental, social, governance issues. Die Betriebswirtschaft, 71(5), 506.

Berger, A. N., & Udell, G. F. (1995). Relationship lending and lines of credit in small firm finance. Journal of Business, 351–381.

Bharath, S. T., Dahiya, S., Saunders, A., & Srinivasan, A. (2011). Lending relationships and loan contract terms. The Review of Financial Studies, 24(4), 1141–1203.CrossRef

Bodhanwala, S., & Bodhanwala, R. (2018). Does corporate sustainability impact firm profitability? Evidence from India. Management Decision, 56(8), 1734–1747.CrossRef

Bonini, S., Capizzi, V., & Zocchi, P. (2019). The performance of angel-backed companies. Journal of Banking & Finance, 100, 328–345.CrossRef

Bouslah, K., Kryzanowski, L., & M’zali, B. (2013). The impact of the dimensions of social performance on firm risk. Journal of Banking & Finance, 37(4), 1258–1273.CrossRef

Boutin-Dufresne, F., & Savaria, P. (2004). Corporate social responsibility and financial risk. The Journal of Investing, 13(1), 57–66.CrossRef

Bradford, C. S. (2012). Crowdfunding and the federal securities laws. Colum. Bus. L. Rev., 1.

British Business Bank (2019). Small Business Finance Markets report 2019.

Boffo, R., Marshall, C., & Patalano, R. (2020). ESG investing: Environmental pillar scoring and reporting. Retrived, 14, 2021.

Boot, A. W., & Thakor, A. V. (2000). Can relationship banking survive competition? The journal of Finance, 55(2), 679–713.

Chambers, D., Saleuddin, R., & Mcmahon, C. (2019). Alternative finance: A historical perspective. Financial History Review, 26(2), 109–126.CrossRef

Chemla, G., & Tinn, K. (2020). Learning through crowdfunding. Management Science, 66(5), 1783–1801.CrossRef

Chen, H. M., Kuo, T. C., & Chen, J. L. (2022). Impacts on the ESG and financial performances of companies in the manufacturing industry based on the climate change related risks. Journal of Cleaner Production, 380, 134951.CrossRef

Cheng, M., & Hasan, I. (2023). Firm ESG Practices and the Terms of Bank Lending. Sustainable finance and ESG: Risk, management, regulations, and implications for financial institutions (pp. 91–124). Springer International Publishing.CrossRef

Cheng, M., & Qu, Y. (2020). Does bank FinTech reduce credit risk? Evidence from China. Pacific-Basin Finance Journal, 63, 101398.CrossRef

Courtney, C., Dutta, S., & Li, Y. (2017). Resolving information asymmetry: Signaling, endorsement, and crowdfunding success. Entrepreneurship Theory and Practice, 41(2), 265–290.CrossRef

Cumming, D. (2008). Contracts and exits in venture capital finance. The Review of Financial Studies, 21(5), 1947–1982.CrossRef

Cumming, D., Johan, S., & Reardon, R. (2023). Global fintech trends and their impact on international business: A review. Multinational Business Review, 31(3), 413–436.CrossRef

Cumming, D., Meoli, M., & Vismara, S. (2019). Investors’ choices between cash and voting rights: Evidence from dual-class equity crowdfunding. Research Policy, 48(8), 103740.CrossRef

Dass, N., & Massa, M. (2011). The impact of a strong bank-firm relationship on the borrowing firm. The Review of Financial Studies, 24(4), 1204–1260.CrossRef

Degryse, H., & Van Cayseele, P. (2000). Relationship lending within a bank-based system: Evidence from European small business data. Journal of Financial Intermediation, 9(1), 90–109.CrossRef

Diamond, D. W. (1984). Financial intermediation and delegated monitoring. The Review of Economic Studies, 51(3), 393–414.CrossRef

EBA. (2020). Guidelines on loan origination and monitoring. EBA.

EBA. (2021). On Management and supervision of ESG Risks for Credit Institutions and Investment Firms.

El Ghoul, S., Guedhami, O., Kwok, C. C., & Mishra, D. R. (2011). Does corporate social responsibility affect the cost of capital? Journal of Banking & Finance, 35(9), 2388–2406.CrossRef

Fama, E. F. (1985). What’s different about banks? Journal of Monetary Economics, 15(1), 29–39.CrossRef

Farag, H., & Johan, S. (2021). How alternative finance informs central themes in corporate finance. Journal of Corporate Finance, 101879.

Fasano, F., & Cappa, F. (2022). How do banking fintech services affect SME debt? Journal of Economics and Business, 121, 106070.CrossRef

Fatemi, A., Fooladi, I., & Tehranian, H. (2015). Valuation effects of corporate social responsibility. Journal of Banking & Finance, 59, 182–192.CrossRef

Ferri, G., & Messori, M. (2000). Bank–firm relationships and allocative efficiency in Northeastern and Central Italy and in the South. Journal of Banking & Finance, 24(6), 1067–1095.CrossRef

Fiordelisi, F., Soana, M. G., & Schwizer, P. (2014). Reputational losses and operational risk in banking. The European Journal of Finance, 20(2), 105–124.CrossRef

Freeman, R. E. (1984). Corporate views of the public interest.

Freeman, R. E., Dmytriyev, S. D., & Phillips, R. A. (2021). Stakeholder theory and the resource-based view of the firm. Journal of Management, 47(7), 1757–1770.

Friedman, M. (1970). Comment on Tobin. The Quarterly Journal of Economics, 84(2), 318–327.

Frooman, J. (1997). Socially irresponsible and illegal behavior and shareholder wealth: A meta-analysis of event studies. Business & Society, 36(3), 221–249.CrossRef

Gabison G. (2014). Understanding crowdfunding and its regulations. EUR 26992. Luxembourg (Luxembourg): Publications Office of the European Union; 2014. JRC92482

Galema, R., Plantinga, A., & Scholtens, B. (2008). The stocks at stake: Return and risk in socially responsible investment. Journal of Banking & Finance, 32(12), 2646–2654.CrossRef

Geršl, A., & Jakubík, P. (2011). Relationship lending in emerging markets: Evidence from the Czech Republic. Comparative Economic Studies, 53, 575–596.CrossRef

Goss, A., & Roberts, G. S. (2011). The impact of corporate social responsibility on the cost of bank loans. Journal of Banking & Finance, 35(7), 1794–1810.CrossRef

Hart, O., & Moore, J. (1999). Foundations of incomplete contracts. The Review of Economic Studies, 66(1), 115–138.CrossRef

Hassan, M. K., Chiaramonte, L., Dreassi, A., Paltrinieri, A., & Piserà, S. (2021). The crossroads of ESG and religious screening on firm risk. Research in International Business and Finance, 58, 101500.CrossRef

Hornuf, L., Schmitt, M., & Stenzhorn, E. (2020). Does a local bias exist in equity crowdfunding? Max Planck Institute for Innovation & Competition Research Paper, (16–07).

Kaplan, S. N., & Strömberg, P. (2003). Financial contracting theory meets the real world: An empirical analysis of venture capital contracts. The Review of Economic Studies, 70(2), 281–315.CrossRef

Khan, M. A. (2022). ESG disclosure and Firm performance: A bibliometric and meta analysis. Research in International Business and Finance, 61, 101668.CrossRef

Klassen, R. D., & McLaughlin, C. P. (1996). The impact of environmental management on firm performance. Management Science, 42(8), 1199–1214.CrossRef

Kovács, K., Vicze, G., Végh, A., Balogh, A., & Dobos, A. (2020). White paper on alternative finance, altfinator. Ref. Ares, 2020, 2323913.

Lee, D. D., & Faff, R. W. (2009). Corporate sustainability performance and idiosyncratic risk: A global perspective. Financial Review, 44(2), 213–237.CrossRef

Li, Z., Feng, L., Pan, Z., & Sohail, H. M. (2022). ESG performance and stock prices: evidence from the COVID-19 outbreak in China. Humanities and Social Sciences Communications, 9(1), 1–10.

Li, H., Zhang, X., & Zhao, Y. (2022). ESG and firm’s default risk. Finance Research Letters, 47, 102713.CrossRef

Luo, D. (2022). ESG, liquidity, and stock returns. Journal of International Financial Markets, Institutions and Money, 78, 101526.CrossRef

Margolis, J. D., Elfenbein, H. A., & Walsh, J. P. (2009). Does it pay to be good... and does it matter? A meta-analysis of the relationship between corporate social and financial performance. And does it matter.

Marshall, B. B. (2004). The effect of firm financial characteristics and the availability of alternative finance on IPO underpricing. Journal of Economics and Finance, 28(1), 88–103.CrossRef

McKenny, A. F., Allison, T. H., Ketchen, D. J., Jr., Short, J. C., & Ireland, R. D. (2017). How should crowdfunding research evolve? A survey of the entrepreneurship theory and practice editorial board. Entrepreneurship Theory and Practice, 41(2), 291–304.CrossRef

Nordea. (2017). Nordea Equity Research, 2017.

OECD. (2016). Financing SMEs and Entrepreneurs 2016. OECD Publishing.CrossRef

OECD. (2020). Financing SMEs and Entrepreneurs 2020: An OECD Scoreboard. OECD Publishing.CrossRef

Ongena, S., & Smith, D. C. (2001). The duration of bank relationships. Journal of Financial Economics, 61(3), 449–475.CrossRef

Palmieri, E., Ferilli, G. B., Stefanelli, V., Geretto, E. F., & Polato, M. (2023a). Assessing the influence of ESG score, industry, and stock index on firm default risk: A sustainable bank lending perspective. Finance Research Letters, 57, 104274.CrossRef

Palmieri, E., Geretto, E. F., & Polato, M. (2023a). ESG default risk mitigation effect: A time-sectorial analysis. In New challenges for the banking industry: Searching for balance between corporate governance, sustainability and innovation (pp. 79–98). Cham: Springer Nature Switzerland.

Petersen, M. A., & Rajan, R. G. (1994). The benefits of lending relationships: Evidence from small business data. The Journal of Finance, 49(1), 3–37.CrossRef

Plumlee, M., Brown, D., Hayes, R. M., & Marshall, R. S. (2015). Voluntary environmental disclosure quality and firm value: Further evidence. Journal of Accounting and Public Policy, 34(4), 336–361.CrossRef

Porter, M. E. (1991). Towards a dynamic theory of strategy. Strategic Management Journal, 12(S2), 95–117.CrossRef

Porter, M. E., & Kramer, M. R. (2006). The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78–92.

Ralcheva, A., & Roosenboom, P. (2020). Forecasting success in equity crowdfunding. Small Business Economics, 55, 39–56.CrossRef

Renn, O., Klinke, A., & Van Asselt, M. (2011). Coping with complexity, uncertainty and ambiguity in risk governance: A synthesis. Ambio, 40, 231–246.CrossRef

Richardson, A. J., & Welker, M. (2001). Social disclosure, financial disclosure and the cost of equity capital. Accounting, organizations and society, 26(7–8), 597–616.

Sassen, R., Hinze, A. K., & Hardeck, I. (2016). Impact of ESG factors on firm risk in Europe. Journal of Business Economics, 86, 867–904.CrossRef

Schwert, M. (2018). Bank capital and lending relationships. The Journal of Finance, 73(2), 787–830.CrossRef

Senadheera, S. S., Gregory, R., Rinklebe, J., Farrukh, M., Rhee, J. H., & Ok, Y. S. (2022). The development of research on environmental, social, and governance (ESG): A bibliometric analysis. Sustainable Environment, 8(1), 2125869.CrossRef

Sharfman, M. P., & Fernando, C. S. (2008). Environmental risk management and the cost of capital. Strategic Management Journal, 29(6), 569–592.CrossRef

Shneor, R., Ziegler, T., Garvey, K., Wenzlaff, K., Yerolemou, N., Rui, H., & Zhang, B. (2018). Expanding horizons: The 3rd European alternative finance industry report. Available at SSRN 3106911.

Subramanian, K. V., & Tung, F. (2016). Law and project finance. Journal of Financial Intermediation, 25, 154–177.CrossRef

Thakor, A. V. (2020). Fintech and banking: What do we know? Journal of Financial Intermediation, 41, 100833.

Tirloni, G., & Antonietti, A. (2020). Le nuove linee guida EBA sulla concessione e monitoraggio del credito.

Treepongkaruna, S., Kyaw, K., & Jiraporn, P. (2022). Shareholder litigation rights and ESG controversies: A quasi-natural experiment. International Review of Financial Analysis, 84, 102396.CrossRef

Uchida, S., & Hashimoto, T. (2019). Social indicators in corporate activities considering SDGs: the profit maximization criteria of companies and SDGs. International Association for Impact Assessment.

United Nations—UN. (2019). UN Global Compact Progress Report 2019.

Vallee, B., & Zeng, Y. (2019). Marketplace lending: A new banking paradigm? The Review of Financial Studies, 32(5), 1939–1982.CrossRef

Veena Iyer, S. (2020). Venture debt: A catalyst for Indian entrepreneurship. Venture Capital, 22(3), 215–238.CrossRef

Waddock, S. A., & Graves, S. B. (1997). Quality of management and quality of stakeholder relations: Are they synonymous? Business & Society, 36(3), 250–279.CrossRef

Wendel, C. B. (2015). The impact of alternative finance on the equipment finance and leasing industry. Journal of Equipment Lease Financing, 33(2).

Wong, W. C., Batten, J. A., Mohamed-Arshad, S. B., Nordin, S., & Adzis, A. A. (2021). Does ESG certification add firm value? Finance Research Letters, 39, 101593.CrossRef

Xu, L., Liu, Q., Li, B., & Ma, C. (2022). Fintech business and firm access to bank loans. Accounting & Finance, 62(4), 4381–4421.CrossRef

Yasar, B. (2021). The new investment landscape: Equity crowdfunding. Central Bank Review, 21(1), 1–16.CrossRef

Zhang, B., Wardrop, R., Rau, P. R., & Gray, M. (2015). Moving mainstream: Benchmarking the European alternative finance market. Journal of Financial Perspectives, 3(3).

Zhao, X., Fang, L., & Zhang, K. (2023). Online search attention, firms’ ESG and operating performance. International Review of Economics & Finance, 88, 223–236.CrossRef

Ziegler, T., Shneor, R., Wenzlaff, K., Wang, B., Kim, J., Paes, F. F. D. C., Suresh, K., Zhang, B. Z., Mammadova, L., & Adams, N. (2021). The global alternative finance market benchmarking report. Available at SSRN 3771509.

Title: Introduction
Authors: Egidio Palmieri
Enrico Fioravante Geretto
Publisher: Springer Nature Switzerland
Book: Adapting to Change
Print ISBN: 978-3-031-50264-4

Electronic ISBN: 978-3-031-50265-1

Copyright Year: 2023
DOI: https://doi.org/10.1007/978-3-031-50265-1_1