Determinants of EU Firms’ Green Investment Strategies: A Survey-Based Analysis

39 Pages Posted: 27 Mar 2023

See all articles by Fotios Kalantzis

Fotios Kalantzis

European Union - European Investment Bank

Sofia Dominguez

United Nations Conference on Trade and Development

Abstract

This study uses unique firm-level data from European Investment Bank Investment Survey (EIBIS) to identify EU firms' green investment strategies and associated factors. We initially run a clustering analysis that results in five distinct clusters in line with the literature and then investigate the role of various firms' characteristics in their adoption based on a multi-logit regression. Our findings show that almost half of the EU firms adopt either "wait-and-see" strategies or plan to invest in tackling climate change risks. Greener investment strategies appear to be positively associated with the awareness of climate-related risks, especially with firms that see the transition to a low-carbon future as an opportunity. Similarly, those strategies are followed by firms that face fewer credit constraints and operate in an environment with a strong push for climate action from various stakeholders. In addition, we find that sectoral and regional peer effects may positively affect the uptake of greener strategies. These findings are valuable as they can guide policymakers in supporting firms' transformation to play their part, as an integral part of our society, on the road to a clean, affordable, and secure energy future.

Keywords: EIBIS, green investment strategies, climate change risks, perception analysis, clustering analysis

Suggested Citation

Kalantzis, Fotios and Dominguez, Sofia, Determinants of EU Firms’ Green Investment Strategies: A Survey-Based Analysis. Available at SSRN: https://ssrn.com/abstract=4401441 or http://dx.doi.org/10.2139/ssrn.4401441

Fotios Kalantzis (Contact Author)

European Union - European Investment Bank

98-100 Boulevard Konrad Adenauer
L-2950
Luxembourg

Sofia Dominguez

United Nations Conference on Trade and Development ( email )

Palais des Nations
Geneva, 1202
Switzerland

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