2025/09/01 by Isabella Mueller, Eleonora Sfrappini · 1 voice · 1 citation
Economics, Econometrics and Finance · #Banking stability, regulation, efficiency #Housing Market and Economics #Sustainable Finance and Green Bonds
paper · doi:10.1016/j.jinteco.2025.104156
openalex publication_date 2025/09/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/02
We analyze how firms’ climate change-related regulatory risks affect banks’ lending. Exploiting the Paris Agreement in a difference-in-differences setting, we find that effects depend on how borrowers will be affected by regulation as well as the stringency of the existing regulatory environment where firms are located. Firms that benefit from regulation receive more credit only if located in more stringent regulatory environments. Conversely, firms hurt by regulation receive more credit if located in less stringent environments or if linked to banks with a portfolio tilted towards lending to negatively impacted firms.