Central Banks Regulations and Sustainability in Transportation Companies (A case study of European Countries)

Abstract

This paper is an attempt to examine the role of regulations from central banks in shaping the sustainable performance of freight companies. Given the enormous effort needed to implement sustainable behavior of the firm, the financial sector and particularly banking regulations play a significant role in allocating resources towards sustainability. In this paper, we empirically test the regulations of European banks and how these regulations impact on sustainability in general and specifically in freight companies in Europe. We divide the regulations into two categories of control and demand regulations and incentives from European banks, and we expect to see our findings with a positive/negative connection with control/demand regulations and a positive association with incentive regulations on the sustainable performance of freight companies. We choose the transportation setting as the result of the significant role of transportation in global sustainability. In addition, we will test our hypotheses by doing a robustness check on our examinations using propensity score matching to test the endogeneity of our selected sample.