Managerial and financial barriers to the net-zero transition

Ralph De Haas, Ralf Martin, Mirabelle Muûls and Helena Schweiger

No 6/2021, BOFIT Discussion Papers from Bank of Finland Institute for Emerging Economies (BOFIT)

Abstract: We use data on 11,233 firms across 22 emerging markets to analyze how credit constraints and low-quality firm management inhibit corporate investment in green technologies. For identification we exploit quasi-exogenous variation in local credit conditions and in exposure to weather shocks. Our results suggest that both financial frictions and managerial constraints slow down firm investment in more energy efficient and less polluting technologies. Complementary analysis of data from the European Pollutant Release and Transfer Register (E-PRTR) corroborates some of this evidence by revealing that in areas where banks deleveraged more after the global financial crisis, industrial facilities reduced their carbon emissions by less. On aggregate this kept local emissions 15% above the level they would have been in the absence of financial frictions.

Keywords: Financial frictions; management practices; CO2 emissions; energy efficiency (search for similar items in EconPapers)
JEL-codes: D22 G32 L20 L23 Q52 Q53 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cfn, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/240384/1/dp2106.pdf (application/pdf)

Related works:
Working Paper: Managerial and Financial Barriers to the Net-Zero Transition (2021)
Working Paper: Managerial and Financial Barriers to the Net-Zero Transition (2021)
Working Paper: Managerial and Financial Barriers to the Net-Zero Transition (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofitp:bdp2021_006

Access Statistics for this paper

More papers in BOFIT Discussion Papers from Bank of Finland Institute for Emerging Economies (BOFIT) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().