Environmental behaviour under credit constraints – Evidence from panel of Indian manufacturing firms

Debarati Ghosh and Meghna Dutta

Structural Change and Economic Dynamics, 2022, vol. 63, issue C, 490-500

Abstract: Firms play a major role in facilitating green growth in developing nations by promoting environmental protection investment to control pollution caused during the manufacturing process. The paper explores whether the financial vulnerability of firms curbs their investment towards environmental practices that eliminate the creation of wastes or pollutants and hence acts as a deterrent towards green economy. Using firm-level data for manufacturing firms from 2010 to 2019, it is confirmed that financial barrier is an encumbrance for eco-investment by firms. We also focus on the environmental behavior of firms classified according to their ownership structure observing that government-owned firms (GOFs) tend to rely less on their internal and debt capital to finance their environmental investment, whereas private-owned firms (POFs) rely mainly on their internal capital. However, internal financing methods have generally no significant impact on the eco-investment decision of foreign-owned firms (FOFs).

Keywords: Environmental investment; Credit-constraints; Firms; India (search for similar items in EconPapers)
JEL-codes: C33 D22 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:63:y:2022:i:c:p:490-500

DOI: 10.1016/j.strueco.2022.07.004

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