Managerial and financial barriers to the green transition

Ralph De Haas, Ralf Martin, Mirabelle Muûls () and Helena Schweiger ()
Additional contact information
Mirabelle Muûls: Research and Economics Department, NBB and Imperial College London
Helena Schweiger: European Bank for Reconstruction and Development

No 439, Working Paper Research from National Bank of Belgium

Abstract: Using data on 10,769 firms across 22 emerging markets, we show that both credit constraints and weak green management hold back corporate investment in green technologies embodied in new machinery, equipment and vehicles. In contrast, investment in measures to explicitly reduce emissions and other pollution, is mainly determined by the quality of a firm’s green management and less so by binding credit constraints. In addition, data from the European Pollutant Release and Transfer Register reveal the climate impact of these organizational constraints. In areas where more firms are credit constrained and weakly managed, industrial facilities systematically emit more CO2 and other greenhouse gases. A counterfactual analysis shows that credit constraints and weak management have respectively kept CO2 emissions 4.8% and 2.2% above the levels that would have prevailed without such constraints. This is further corroborated by our finding that in localities where banks had to deleverage more due to the Global Financial Crisis, carbon emissions by industrial facilities remained 5.7% higher a decade later.

Keywords: Green management; credit constraints; CO2 emissions; energy efficiency (search for similar items in EconPapers)
JEL-codes: D22 G32 L20 L23 Q52 Q53 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2023-06
New Economics Papers: this item is included in nep-cfn, nep-ene and nep-env
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Managerial and Financial Barriers to the Green Transition (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:202306-439

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