Using banks in the syndicated lending market, we discuss a firm-specific strategy that has been overlooked by the literature, namely, that self-regulated firms pressure other non-self-regulated firms in an attempt to reduce effort asymmetries when collaborating. We develop a framework that shows when such a strategy is likely to be present. This framework is built on the view that the costs and benefits of collaboration are equally shared among self-regulated firms that collaborate. However, when self-regulated firms collaborate with non-self-regulated firms, the effort they exert differs and is not equally shared. In particular, we find that when firms collaborate, self-regulated firms pressure non-self-regulated firms to become self-regulated with the purpose of reducing effort asymmetries, and such a pressure increases with the duration of the collaboration.
|Place of Publication||Maastricht|
|Publisher||Maastricht University, Graduate School of Business and Economics|
|Publication status||Published - 1 Jan 2016|
|Series||GSBE Research Memoranda|
Bos, J. W. B., Contreras, M. G., & Kleimeier, S. (2016). Self-regulation in collaborative environments : the case of the equator principles in banking. Maastricht University, Graduate School of Business and Economics. GSBE Research Memoranda, No. 007