Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240384 
Year of Publication: 
2021
Series/Report no.: 
BOFIT Discussion Papers No. 6/2021
Publisher: 
Bank of Finland, Bank of Finland Institute for Emerging Economies (BOFIT), Helsinki
Abstract: 
We use data on 11,233 firms across 22 emerging markets to analyze how credit constraints and low-quality firm management inhibit corporate investment in green technologies. For identification we exploit quasi-exogenous variation in local credit conditions and in exposure to weather shocks. Our results suggest that both financial frictions and 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) corroborates some of this evidence by revealing that in areas where banks deleveraged more after the global financial crisis, industrial facilities reduced their carbon emissions by less. On aggregate this kept local emissions 15% above the level they would have been in the absence of financial frictions.
Subjects: 
Financial frictions
management practices
CO2 emissions
energy efficiency
JEL: 
D22
L23
G32
L20
Q52
Q53
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-375-1
Document Type: 
Working Paper

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