Managerial and financial barriers during the green transition

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

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We use data on 10,852 firms across 22 emerging markets to analyse how credit constraints and deficient firm management inhibit corporate investment in green technologies. For identification, we exploit quasi-exogenous variation in local credit conditions. Our results indicate that both credit constraints and green 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) reveals the pollution impact of these constraints. We show that in areas where more firms are credit constrained and weakly managed, industrial facilities systematically emit more CO2 and other gases. This is corroborated by the finding that in areas where banks needed to deleverage more after the Global Financial Crisis, industrial facilities subsequently reduced their carbon emissions considerably less. On aggregate this kept CO2 emissions 5.6% above the level they would have been in the absence of credit constraints.

Keywords: credit constraints; green management; CO2 emissions; energy efficiency (search for similar items in EconPapers)
JEL-codes: G32 L20 L23 Q52 Q53 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2022-03-07
New Economics Papers: this item is included in nep-cfn, nep-ene, nep-env and nep-fdg
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http://eprints.lse.ac.uk/117807/ Open access version. (application/pdf)

Related works:
Working Paper: Managerial and financial barriers during the green transition (2022)
Working Paper: Managerial and financial barriers during the green transition (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:117807

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