Relationship Banking and Corporate Green Investments

Lucas Marchand (), Céline Meslier () and Amine Tarazi ()
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Lucas Marchand: LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges
Céline Meslier: LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges
Amine Tarazi: LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges

Working Papers from HAL

Abstract: This paper examines how relationship banking shapes firms' environmental investment decisions. Combining plant-level data on green investments with bank-firm relationship records for French manufacturers, we exploit the 2016 French floods as an exogenous shock to environmental awareness. Our difference-in-differences estimates show that long-term banking ties reduce the likelihood of investing in pollution prevention when firms are more dependent on their main lenders. This pattern reflects the transformative and unconventional nature of these investments, which may challenge banks' accumulated informational capital, particularly when the scale of the required environmental transition is substantial.

Keywords: relationship banking; informational capital; green investments (search for similar items in EconPapers)
Date: 2026-04-03
Note: View the original document on HAL open archive server: https://hal.science/hal-05579390v1
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