Environmental performance and firm financing during COVID-19 outbreaks: evidence from SMEs

Nirosha Hewa Wellalage, Vijay Kumar, Ahmed Imran Hunjra*, Mamdouh Abdulaziz Saleh Al-Faryan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


The COVID-19 pandemic has resulted in substantial constraints for small and medium enterprises (SMEs) worldwide. The techniques in which SMEs handle recent crises and the degree to which environmental performance is advantageous when the marketplace experiences an adverse shock is fairly untouched in the literature. To assess this probability, we examine, using data from 6,597 SMEs in 13 developing countries, the effect of firm environmental efficiency on firm financing during the COVID-19 outbreak. We consider three aspects of external financing – bank, non-bank and trade credit – and suggest that it pays for firms to show devotion to environmental obligations in a global pandemic. Our research implies that the trust between a firm and its stakeholders, if it is based on environmental performance, pays off during periods of shock and adversity.

Original languageEnglish
Article number102568
Number of pages8
JournalFinance Research Letters
Issue numberPart A
Early online date18 Nov 2021
Publication statusPublished - 6 Jun 2022


  • COVID-19
  • environmental performance
  • environmental regulations
  • firm financing
  • small and medium enterprises (SMEs)


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