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Credit supply and green investments

Author

Listed:
  • Antonio Accetturo

    (Bank of Italy)

  • Giorgia Barboni

    (University of Warwick)

  • Michele Cascarano

    (Bank of Italy)

  • Emilia Garcia-Appendini

    (Norges Bank and University of Zurich)

  • Marco Tomasi

    (University of Trento)

Abstract

Does an increase in credit supply affect firms' likelihood to invest in green technologies? Using text algorithms to extract information on the green investments of Italian firms between 2015 and 2019 and a firm-level instrument for credit availability, we find a large positive elasticity of green investments to credit supply. Consistent with a large capital intensity of green investments, this effect is concentrated among firms with ample internal resources. We find also that private credit supply must be supplemented by public subsidies to accelerate green transition.

Suggested Citation

  • Antonio Accetturo & Giorgia Barboni & Michele Cascarano & Emilia Garcia-Appendini & Marco Tomasi, 2024. "Credit supply and green investments," Temi di discussione (Economic working papers) 1456, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1456_24
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    More about this item

    Keywords

    credit supply; CO2 emissions; green investments; climate finance; bank credit;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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