Bank Liquidity, Credit Supply and the Environment

70 Pages Posted: 28 Dec 2017 Last revised: 2 Feb 2018

See all articles by Ross Levine

Ross Levine

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Zigan Wang

The University of Hong Kong - School of Economics and Finance; Columbia University

Wensi Xie

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Multiple version iconThere are 2 versions of this paper

Date Written: December 27, 2017

Abstract

We evaluate 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, we construct 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, we discover that positive shocks to credit conditions reduce corporate pollution.

Keywords: Bank Liquidity Gains, Pollution, Toxic Emissions

JEL Classification: G21, Q52, Q53, Q40

Suggested Citation

Levine, Ross Eric and Lin, Chen and Wang, Zigan and Xie, Wensi, Bank Liquidity, Credit Supply and the Environment (December 27, 2017). Available at SSRN: https://ssrn.com/abstract=3093506 or http://dx.doi.org/10.2139/ssrn.3093506

Ross Eric Levine (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Zigan Wang

The University of Hong Kong - School of Economics and Finance ( email )

8th Floor Kennedy Town Centre
23 Belcher's Street
Kennedy Town
Hong Kong

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Wensi Xie

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

Register to save articles to
your library

Register

Paper statistics

Downloads
89
Abstract Views
472
rank
276,695
PlumX Metrics