IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i10p3943-d1390620.html
   My bibliography  Save this article

Do Natural Disasters Reduce Loans to the More CO 2 -Emitting Sectors?

Author

Listed:
  • Antonio Forte

    (CER-Roma, Dipartimento di Scienze Economiche e Statistiche, Università di Salerno, 84084 Fisciano, Italy)

  • Selay Sahan

    (Central Bank of the Republic of Turkey, 34435 Istanbul, Turkey)

  • Damiano B. Silipo

    (Dipartimento di Economia, Statistica e Finanza, Università della Calabria, 87036 Rende, Italy)

Abstract

We studied the impact of major floods occurring in Turkey between 2005 and 2020 on lending and the allocation of loans between sectors that differ in their CO 2 emissions. Our evidence shows that the floods are not significant determinants of lending or the allocation of loans between sectors, even though CO 2 emissions contribute to the reallocation of loans from the more polluting to the less polluting sectors. Indeed, risks and returns of the sector remain the main determinants of lending and of the allocation of loans among sectors. The results are robust to alternative estimation methods and specifications of the econometric models. Since in the period of investigation no environmental regulations were implemented in Turkey, and the Paris Agreement was ratified only at end-2021, the evidence suggests that more stringent regulations and green policies are required to accelerate the green transition in Turkey.

Suggested Citation

  • Antonio Forte & Selay Sahan & Damiano B. Silipo, 2024. "Do Natural Disasters Reduce Loans to the More CO 2 -Emitting Sectors?," Sustainability, MDPI, vol. 16(10), pages 1-24, May.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:10:p:3943-:d:1390620
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/10/3943/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/10/3943/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cortés, Kristle Romero & Strahan, Philip E., 2017. "Tracing out capital flows: How financially integrated banks respond to natural disasters," Journal of Financial Economics, Elsevier, vol. 125(1), pages 182-199.
    2. Jean-Stéphane Mésonnier, 2019. "Banks' climate commitments and credit to brown industries: new evidence for France," Working papers 743, Banque de France.
    3. Mueller, Isabella & Sfrappini, Eleonora, 2022. "Climate Change-Related Regulatory Risks and Bank Lending," Working Paper Series 2670, European Central Bank.
    4. David Antonio C., 2011. "How do International Financial Flows to Developing Countries Respond to Natural Disasters?," Global Economy Journal, De Gruyter, vol. 11(4), pages 1-38, December.
    5. Aslan, Caglayan & Bulut, Erdem & Cepni, Oguzhan & Yilmaz, Muhammed Hasan, 2022. "Does climate change affect bank lending behavior?," Economics Letters, Elsevier, vol. 220(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Franziska Bremus & Malte Rieth, 2023. "Integrating Out Natural Disaster Shocks," Discussion Papers of DIW Berlin 2063, DIW Berlin, German Institute for Economic Research.
    2. Cécile Couharde & Rémi Generoso, 2015. "Hydro-climatic thresholds and economic growth reversals in developing countries: an empirical investigation," EconomiX Working Papers 2015-26, University of Paris Nanterre, EconomiX.
    3. Christian Hubert Ebeke, 2011. "Does the dual-citizenship recognition determine the level and the utilization of international remittances? Cross-Country Evidence," CERDI Working papers halshs-00559528, HAL.
    4. Galina Hale & Brigid C. Meisenbacher & Fernanda Nechio, 2024. "Industrial Composition of Syndicated Loans and Banks’ Climate Commitments," Working Paper Series 2024-23, Federal Reserve Bank of San Francisco.
    5. Jean-Louis COMBES & Christian EBEKE & Mireille NTSAMA ETOUNDI, 2011. "Are Foreign Aid and Remittances a Hedge against Food Price Shocks in Developing Countries?," Working Papers 201121, CERDI.
    6. Pham, Tho & Talavera, Oleksandr & Tsapin, Andriy, 2018. "Shock contagion, asset quality and lending behavior," BOFIT Discussion Papers 21/2018, Bank of Finland Institute for Emerging Economies (BOFIT).
    7. Shi, Yining, 2022. "Financial liberalization and house prices: Evidence from China," Journal of Banking & Finance, Elsevier, vol. 145(C).
    8. Erel, Isil & Liebersohn, Jack, 2022. "Can FinTech reduce disparities in access to finance? Evidence from the Paycheck Protection Program," Journal of Financial Economics, Elsevier, vol. 146(1), pages 90-118.
    9. Mercy Berman DeMenno, 2023. "Environmental sustainability and financial stability: can macroprudential stress testing measure and mitigate climate-related systemic financial risk?," Journal of Banking Regulation, Palgrave Macmillan, vol. 24(4), pages 445-473, December.
    10. Rubio-Andrés, Mercedes & Ramos-González, Mª del Mar & Sastre-Castillo, Miguel Ángel & Gutiérrez-Broncano, Santiago, 2023. "Stakeholder pressure and innovation capacity of SMEs in the COVID-19 pandemic: Mediating and multigroup analysis," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    11. Becerra, Oscar & Cavallo, Eduardo & Noy, Ilan, 2015. "Where is the money? Post-disaster foreign aid flows," Environment and Development Economics, Cambridge University Press, vol. 20(5), pages 561-586, October.
    12. Smolyansky, Michael, 2019. "Policy externalities and banking integration," Journal of Financial Economics, Elsevier, vol. 132(3), pages 118-139.
    13. Damette, Olivier & Mathonnat, Clément & Thavard, Julien, 2024. "Climate and sovereign risk: The Latin American experience with strong ENSO events," World Development, Elsevier, vol. 178(C).
    14. Sebastian Doerr & Thomas Drechsel & Donggyu Lee, 2022. "Income Inequality and Job Creation," Staff Reports 1021, Federal Reserve Bank of New York.
    15. Sebastian Doerr & Thomas Drechsel & Donggyu Lee, 2021. "Income inequality, financial intermediation, and small firms," BIS Working Papers 944, Bank for International Settlements.
    16. Choudhary, M. Ali & Jain, Anil, 2022. "Finance and inequality: The distributional impacts of bank credit rationing," Journal of Financial Intermediation, Elsevier, vol. 52(C).
    17. Christian Hubert Ebeke, 2011. "Remittances, Countercyclicality, Openness and Government Size," Recherches économiques de Louvain, De Boeck Université, vol. 77(4), pages 89-114.
    18. Brei, Michael & Mohan, Preeya & Strobl, Eric, 2019. "The impact of natural disasters on the banking sector: Evidence from hurricane strikes in the Caribbean," The Quarterly Review of Economics and Finance, Elsevier, vol. 72(C), pages 232-239.
    19. Berger, Allen N. & Molyneux, Phil & Wilson, John O.S., 2020. "Banks and the real economy: An assessment of the research," Journal of Corporate Finance, Elsevier, vol. 62(C).
    20. Müller, Isabella & Nguyen, Huyen & Nguyen, Trang, 2024. "Carbon transition risk and corporate loan securitization," IWH Discussion Papers 22/2022, Halle Institute for Economic Research (IWH), revised 2024.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:10:p:3943-:d:1390620. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.