Value-Driven Bankers and the Granting of Credit to Green Firms

Di Bu, Matti Keloharju, Yin Liao and Steven Ongena
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Di Bu: Macquarie University
Matti Keloharju: Aalto University; Research Institute of Industrial Economics; CEPR
Yin Liao: Macquarie University; Australian National University

No 23-113, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: How do bankers treat green firms? Utilizing unique loan application and banker preference data from a mid-sized bank, we find that customer managers, serving as front-line bankers, provide more favorable recommendations for green firms, particularly when they hold strong green values. However, a minority of environmentally skeptical bankers counteract this trend. These brown managers fake green interests when their recommendations bear no weight, and conversely, diminish their endorsements to green firms when they do hold significance. Additionally, brown loan officers, acting as superiors to these managers, strive to offset positive green firm evaluations by downgrading them.

Keywords: Green bank lending; customer managers; loan officers; values (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2023-11
New Economics Papers: this item is included in nep-ban, nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp23113

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