Bank agglomeration and corporate environmental responsibility performance: Evidence from Chinese bank branch data

While corporate environmental responsibility (CER) has attracted widespread attention in recent years, there is still very little understanding as regards whether bank agglomeration affects CER practices. This study has measured the agglomeration of bank branches around Chinese listed enterprises from 2011 to 2020 using Python and the Baidu Map API. For the first time, the study has revealed that, bank agglomeration can have a positive impact on CER practices by reducing financial constraints on enterprises and fostering green business practices. This impact is more significant for private enterprises, enterprises with high costs of equity, enterprises in nonpollution-intensive industries, and enterprises in highly marketized regions. CER performance can be better enhanced by the clustering of state-owned, local, and foreign bank branches around enterprises. In addition, the entry and exit of bank branches can improve CER performance as it can foster the effective allocation of financial resources, and this effect is more evident for private enterprises. To conclude, this study has evaluated the value of bank branch evolution for the environment and society of emerging countries.

Automated summary

This study measures the agglomeration of bank branches around Chinese listed enterprises and reveals that bank agglomeration has a positive impact on corporate environmental responsibility (CER) practices. It reduces financial constraints on enterprises and fosters green business practices. Furthermore, the clustering of state-owned, local, and foreign bank branches, as well as the entry and exit of bank branches, improve CER performance.