Managerial and Financial Barriers to the Net-Zero Transition
We use data on 11,233 firms across 22 emerging markets to analyze how credit constraints and low-quality firm management inhibit corporate investment in green technologies. For identification we exploit quasi-exogenous variation in local credit conditions in the aftermath of the global financial crisis. We find that both financial frictions and managerial constraints slow down firm investment in more energy efficient and less polluting technologies. Complementary analysis of data from the European Pollutant Release and Transfer Register (E-PRTR) reveals that in areas where banks deleveraged more after the global financial crisis, industrial facilities reduced their carbon emissions by less.
(joint with Ralph De Haas, Ralf Martin, and Helena Schweiger)