Greener Together: How Being Environmentally Responsible Shapes Firms’ Strategic Alliance Decisions
Presentation Type
Poster Presentation
In Person or Zoom Presentation
In-Person
Campus
Daytona Beach
Status
Faculty
Faculty/Staff Department
Accounting, Economics, Finance, & Information Sciences
Presentation Description/Abstract
We examine how corporate environmental responsibility influences firms’ decisions to form environmental strategic alliances. Using data on more than 29,000 alliances formed by publicly traded U.S. firms from 1995 to 2019 and employing a large language model (LLM) to identify environmental alliances, we find that firms with stronger environmental CSR scores are significantly more likely to form such alliances. The effect is driven specifically by corporate environmental responsibility rather than by overall corporate social responsibility and is specific to environmental alliances rather than generic alliance formation. We further show that equity markets respond more positively to environmental alliance announcements by environmentally responsible firms, but only when the alliance's primary objective is explicitly environmental, suggest that investors value substantive environmental commitments over symbolic ones.
Keywords
corporate social responsibility, corporate environmental responsibility, strategic alliances, environmental alliances, large language model
Greener Together: How Being Environmentally Responsible Shapes Firms’ Strategic Alliance Decisions
We examine how corporate environmental responsibility influences firms’ decisions to form environmental strategic alliances. Using data on more than 29,000 alliances formed by publicly traded U.S. firms from 1995 to 2019 and employing a large language model (LLM) to identify environmental alliances, we find that firms with stronger environmental CSR scores are significantly more likely to form such alliances. The effect is driven specifically by corporate environmental responsibility rather than by overall corporate social responsibility and is specific to environmental alliances rather than generic alliance formation. We further show that equity markets respond more positively to environmental alliance announcements by environmentally responsible firms, but only when the alliance's primary objective is explicitly environmental, suggest that investors value substantive environmental commitments over symbolic ones.