Managerial and financial barriers during the green transition

Ralph De Haas, Ralf Martin, Mirabelle Muuls and Helena Schweiger

POID Working Papers from Centre for Economic Performance, LSE

Abstract: We use data on 10,852 firms across 22 emerging markets to analyse how credit constraints and deficient firm management inhibit corporate investment in green technologies. For identification, we exploit quasi-exogenous variation in local credit conditions. Our results indicate that both credit constraints and green managerial constraints slow down firm investment in more energy efficient and less polluting technologies. Complementary analysis of data from the European Pollutant Release and Transfer Register (E-PRTR) reveals the pollution impact of these constraints. We show that in areas where more firms are credit constrained and weakly managed, industrial facilities systematically emit more CO2 and other gases. This is corroborated by the finding that in areas where banks needed to deleverage more after the Global Financial Crisis, industrial facilities subsequently reduced their carbon emissions considerably less. On aggregate this kept CO2 emissions 5.6% above the level they would have been in the absence of credit constraints.

Keywords: Credit constraints; green management; CO2 emissions; energy ei??ciency; Productivity (search for similar items in EconPapers)
Date: 2022-12-15
New Economics Papers: this item is included in nep-cfn, nep-ene and nep-env
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Working Paper: Managerial and financial barriers during the green transition (2022)
Working Paper: Managerial and financial barriers during the green transition (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:poidwp:055

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