Credit supply and green Investments

Antonio Accetturo, Giorgia Barboni, Michele Cascarano, Emilia Garcia-Appendini and Marco Tomasi
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Giorgia Barboni: bUniversity of Warwick, Warwick Business School and CAGE
Marco Tomasi: University of Trento

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Does an increase in credit supply affect firms’ likelihood to invest in green technologies? To answer this question, we use text algorithms to extract information on green investments from the comments to the financial statements of Italian SMEs between 2015 and 2019. To identify the effect of credit supply, we use all loans disbursed by banks operating in Italy to construct a firm-specific time-varying instrument for credit availability. We find a large positive elasticity of green investments to credit supply. The effect is concentrated among firms with high availability of internal capital and in areas with higher preferences for environmental protection. Subsidies and market competition can spur green investments if combined with environmental awareness. JEL codes: G32 ; Q54 ; Q55

Keywords: Credit supply; CO2 emissions; green investments; climate finance; bank credit (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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https://warwick.ac.uk/fac/soc/economics/research/c ... tions/wp615.2022.pdf

Related works:
Working Paper: Credit supply and green investments (2024)
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