Credit supply and green investments

Antonio Accetturo, Giorgia Barboni (), Michele Cascarano, Emilia Garcia-Appendini and Marco Tomasi ()
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Giorgia Barboni: University of Warwick
Marco Tomasi: University of Trento

No 1456, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Does an increase in credit supply affect firms' likelihood to invest in green technologies? Using text algorithms to extract information on the green investments of Italian firms between 2015 and 2019 and a firm-level instrument for credit availability, we find a large positive elasticity of green investments to credit supply. Consistent with a large capital intensity of green investments, this effect is concentrated among firms with ample internal resources. We find also that private credit supply must be supplemented by public subsidies to accelerate green transition.

Keywords: credit supply; CO2 emissions; green investments; climate finance; bank credit (search for similar items in EconPapers)
JEL-codes: G32 Q54 Q55 (search for similar items in EconPapers)
Date: 2024-06
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Working Paper: Credit supply and green Investments (2022)
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