Bank Liquidity, Credit Supply, and the Environment

Ross Levine (), Chen Lin, Zigan Wang () and Wensi Xie ()

Working Papers from eSocialSciences

Abstract: The paper evaluates the impact of the credit conditions facing corporations on their emissions of toxic air pollutants. Exploiting cross-county, cross-time shale discoveries that generated liquidity windfalls at local bank branches, it constructs measures of (1) the degree to which banks in non-shale counties, i.e., counties where shale was not discovered, receive liquidity shocks through their branches in shale counties and (2) the degree to which a corporation in a non-shale county has a relationship lender that receives liquidity shocks through its branches. From both the county- and firm-level analyses, the paper discovers that positive shocks to credit conditions reduce corporate pollution.

Keywords: eSS; trade; correlation; macroeconomic implications; technology; macro counterfactuals; trade partners; self-trade shares; micro estimates; real wages; air quality; toxic air pollutants (search for similar items in EconPapers)
Date: 2018-03
Note: Institutional Papers
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Working Paper: Bank Liquidity, Credit Supply, and the Environment (2018)
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