Bank Liquidity, Credit Supply, and the Environment

Ross Levine (), Chen Lin, Zigan Wang and Wensi Xie

No 24375, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We evaluate the impact of the credit conditions facing corporations on their emissions of toxic air pollutants. Exploiting cross-county, cross-time shale discoveries that generated liquidity windfalls at local bank branches, we construct measures of (1) the degree to which banks in non-shale counties, i.e., counties where shale was not discovered, receive liquidity shocks through their branches in shale counties and (2) the degree to which a corporation in a non-shale county has a relationship lender that receives liquidity shocks through its branches. From both the county- and firm-level analyses, we discover that positive shocks to credit conditions reduce corporate pollution.

JEL-codes: G21 O16 Q40 Q52 Q53 (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-ban, nep-ene and nep-env
Note: CF EEE
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Citations: View citations in EconPapers (27)

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Working Paper: Bank Liquidity, Credit Supply, and the Environment (2018)
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