Credit availability of energy-intensive industries in emerging economies: Do financially established firms have better access to credit?

Jintao Zhang, Xinghui Lei, Taoyong Su and Ziyao Li

Energy Economics, 2025, vol. 145, issue C

Abstract: Corporate efforts on carbon emissions reduction may be affected by their financial condition. It is always not clear whether financial institutions consider the financial position of higher carbon-emitting borrowers in credit decisions. This paper investigates the credit availability of higher carbon-emitting firms with different financial conditions in emerging economies. Evidence from energy-intensive industries shows that financially established firms have better access to credit than peers. Financial institutions charge lower credit expenses from those high carbon emitters with more desirable financial positions. We also find that in emerging markets, high carbon emitters employing non-Big Four accounting firms will have higher credit availability if they have strong financial conditions. In addition, access to credit for financially established firms benefits from higher R&D intensity. The results further manifest that the positive correlation between credit availability and a firm's financial position is consistent with the environmental performance of the country in which it is located. As a result, those findings can provide policy inspiration for decarbonization in emerging economies with the help of material efforts from financial sectors.

Keywords: Credit availability; Financial condition; Carbon emissions; Energy-intensive industry; Emerging economies (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325002579

DOI: 10.1016/j.eneco.2025.108433

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