Do affective reactions to sustainability performance unintendedly influence lending decisions?

Andres Guiral, Doocheol Moon, Javier Perez-Garcia, Jungyoon Byun

Research output: Contribution to journalArticlepeer-review


Recent research finds that affective reactions elicited from exposure to Sustainability reports unintentionally influence investors' decisions and that this bias is mitigated through explicit assessment of Corporate Social Responsibility (CSR) performance. An unexplored implication is whether this bias can also affect lenders' decisions, where this bias may have serious unintended consequences on the efficient allocation of credit. While investing decisions' main concern relies on stock return maximization, the borrower's ability to pay back the debt is central in lending decisions and may help lenders to compensate for information asymmetry and assess creditworthiness. Using an experimental method, we find that CSR performance reports do elicit affective reactions but, contrary to the case of investing, they do not provoke unintended effects on credit judgments and lending decisions. Our findings suggest that lenders are likely to attribute their CSR affects to its source and use CSR performance as a proxy for borrowers' integrity.

Original languageEnglish
Pages (from-to)1635-1646
Number of pages12
JournalCorporate Social Responsibility and Environmental Management
Issue number6
Publication statusPublished - 2021 Nov 1

Bibliographical note

Publisher Copyright:
© 2021 ERP Environment and John Wiley & Sons Ltd.

All Science Journal Classification (ASJC) codes

  • Development
  • Strategy and Management
  • Management, Monitoring, Policy and Law


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