Credit supply and green investments

50 Pages Posted: 3 May 2022

See all articles by Antonio Accetturo

Antonio Accetturo

Bank of Italy

Giorgia Barboni

University of Warwick - Finance Group

Michele Cascarano

Bank of Italy

Emilia Garcia-Appendini

University of Zurich - Department of Banking and Finance

Marco Tomasi

University of Trento

Date Written: April 26, 2022

Abstract

What is the role that credit supply plays in the climate transition process? We answer this question by looking at the effect of bank loans on green investments. We use textual algorithms to extract information on green investments from the comments to the financial statements of Italian firms between 2015 and 2019, and match this information with loan-level data from the Italian Credit Registry. Using an exogenous firm-specific time-varying measure of bank credit supply, we find that credit provision significantly increases firms’ likelihood to undertake green investments. This effect is more pronounced for firms operating in regions providing green subsidies, and with high environmental consciousness.

Keywords: Climate finance, financial intermediation, credit supply

JEL Classification: G32, Q54, Q55

Suggested Citation

Accetturo, Antonio and Barboni, Giorgia and Cascarano, Michele and Garcia-Appendini, Emilia and Tomasi, Marco, Credit supply and green investments (April 26, 2022). Available at SSRN: https://ssrn.com/abstract=4093925 or http://dx.doi.org/10.2139/ssrn.4093925

Antonio Accetturo

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giorgia Barboni

University of Warwick - Finance Group ( email )

Gibbet Hill Rd
Coventry, CV4 7AL
Great Britain

Michele Cascarano

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Emilia Garcia-Appendini (Contact Author)

University of Zurich - Department of Banking and Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Marco Tomasi

University of Trento ( email )

Via Giuseppe Verdi 26
Trento, Trento 38152
Italy

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