IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/23072.html
   My bibliography  Save this paper

Characteristics of Green Loan Users and the Green Policy Mix

Author

Listed:
  • Anna L. SOBIECH
  • UCHIDA Hirofumi

Abstract

We analyse the usage of green loans under a public green loan program and document a positive link with borrower financial health. Green loan users have better credit ratings, higher sales growth, and lower leverage. The link remains stable in face of significantly changing conditions for green investments and heightened green policy uncertainty induced by changes in governments’ green policy mix. Green loan users also exhibit better ex-post performance and lower default probability. The results imply that the screening undertaken by the lender matters for efficient green loan provision and highlight the important role of public loan programs in the green policy mix.

Suggested Citation

  • Anna L. SOBIECH & UCHIDA Hirofumi, 2023. "Characteristics of Green Loan Users and the Green Policy Mix," Discussion papers 23072, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:23072
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/23e072.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cantillo, Miguel & Wright, Julian, 2000. "How Do Firms Choose Their Lenders? An Empirical Investigation," The Review of Financial Studies, Society for Financial Studies, vol. 13(1), pages 155-189.
    2. Lone Werner & Bert Scholtens, 2017. "Firm Type, Feed-in Tariff, and Wind Energy Investment in Germany: An Investigation of Decision Making Factors of Energy Producers Regarding Investing in Wind Energy Capacity," Journal of Industrial Ecology, Yale University, vol. 21(2), pages 402-411, April.
    3. Cicchiello, Antonella Francesca & Cotugno, Matteo & Monferrà, Stefano & Perdichizzi, Salvatore, 2022. "Which are the factors influencing green bonds issuance? Evidence from the European bonds market," Finance Research Letters, Elsevier, vol. 50(C).
    4. Tang, Dragon Yongjun & Zhang, Yupu, 2020. "Do shareholders benefit from green bonds?," Journal of Corporate Finance, Elsevier, vol. 61(C).
    5. Yener Altunbas & Alper Kara & David Marques-Ibanez, 2010. "Large debt financing: syndicated loans versus corporate bonds," The European Journal of Finance, Taylor & Francis Journals, vol. 16(5), pages 437-458.
    6. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    7. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 2002. "Government Ownership of Banks," Journal of Finance, American Finance Association, vol. 57(1), pages 265-301, February.
    8. Mariana Mazzucato & Caetano C.R. Penna, 2016. "Beyond market failures: the market creating and shaping roles of state investment banks," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 19(4), pages 305-326, October.
    9. Micco, Alejandro & Panizza, Ugo, 2006. "Bank ownership and lending behavior," Economics Letters, Elsevier, vol. 93(2), pages 248-254, November.
    10. Chu, Ling & Takeuchi, Kenji, 2022. "The non-operating solar projects: Examining the impact of the feed-in tariff amendment in Japan," Energy Policy, Elsevier, vol. 160(C).
    11. Denis, David J. & Mihov, Vassil T., 2003. "The choice among bank debt, non-bank private debt, and public debt: evidence from new corporate borrowings," Journal of Financial Economics, Elsevier, vol. 70(1), pages 3-28, October.
    12. Behr, Patrick & Norden, Lars & Noth, Felix, 2013. "Financial constraints of private firms and bank lending behavior," Journal of Banking & Finance, Elsevier, vol. 37(9), pages 3472-3485.
    13. Brei, Michael & Schclarek, Alfredo, 2013. "Public bank lending in times of crisis," Journal of Financial Stability, Elsevier, vol. 9(4), pages 820-830.
    14. Neuhoff, Karsten & May, Nils & Richstein, Jörn C., 2022. "Financing renewables in the age of falling technology costs," Resource and Energy Economics, Elsevier, vol. 70(C).
    15. Mariana Mazzucato, 2015. "The Green Entrepreneurial State," SPRU Working Paper Series 2015-28, SPRU - Science Policy Research Unit, University of Sussex Business School.
    16. Muhammad-Sukki, Firdaus & Abu-Bakar, Siti Hawa & Munir, Abu Bakar & Mohd Yasin, Siti Hajar & Ramirez-Iniguez, Roberto & McMeekin, Scott G. & Stewart, Brian G. & Sarmah, Nabin & Mallick, Tapas Kumar & , 2014. "Feed-in tariff for solar photovoltaic: The rise of Japan," Renewable Energy, Elsevier, vol. 68(C), pages 636-643.
    17. Isaac Akomea-Frimpong & David Adeabah & Deborah Ofosu & Emmanuel Junior Tenakwah, 2022. "A review of studies on green finance of banks, research gaps and future directions," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 12(4), pages 1241-1264, October.
    18. Berger, Allen N. & Clarke, George R.G. & Cull, Robert & Klapper, Leora & Udell, Gregory F., 2005. "Corporate governance and bank performance: A joint analysis of the static, selection, and dynamic effects of domestic, foreign, and state ownership," Journal of Banking & Finance, Elsevier, vol. 29(8-9), pages 2179-2221, August.
    19. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    20. Berg, Tobias & Carletti, Elena & Claessens, Stijn & Krahnen, Jan Pieter & Monasterolo, Irene & Pagano, Marco, 2023. "Climate regulation and financial risk: The challenge of policy uncertainty," SAFE Policy Letters 100, Leibniz Institute for Financial Research SAFE.
    21. Daniel Carvalho, 2014. "The Real Effects of Government-Owned Banks: Evidence from an Emerging Market," Journal of Finance, American Finance Association, vol. 69(2), pages 577-609, April.
    22. Alharbi, Samar S. & Al Mamun, Md & Boubaker, Sabri & Rizvi, Syed Kumail Abbas, 2023. "Green finance and renewable energy: A worldwide evidence," Energy Economics, Elsevier, vol. 118(C).
    23. Houston, Joel & James, Christopher, 1996. "Bank Information Monopolies and the Mix of Private and Public Debt Claims," Journal of Finance, American Finance Association, vol. 51(5), pages 1863-1889, December.
    24. Mariana Mazzucato & Caetano C.R. Penna, 2016. "Beyond market failures: the market creating and shaping roles of state investment banks," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 19(4), pages 305-326, October.
    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. Randall Morck & M. Deniz Yavuz & Bernard Yeung, 2019. "State-Run Banks, Money Growth, and the Real Economy," Management Science, INFORMS, vol. 65(12), pages 5914-5932, December.
    2. Bertay, Ata Can & Demirgüç-Kunt, Asli & Huizinga, Harry, 2015. "Bank ownership and credit over the business cycle: Is lending by state banks less procyclical?," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 326-339.
    3. D’Orazio, Paola & Valente, Marco, 2019. "The role of finance in environmental innovation diffusion: An evolutionary modeling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 417-439.
    4. Denis Davydov, 2018. "Does State Ownership of Banks Matter?," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 17(2), pages 250-285, August.
    5. Davydov, Denis & Nikkinen, Jussi & Vähämaa, Sami, 2014. "Does the decision to issue public debt affect firm valuation? Russian evidence," Emerging Markets Review, Elsevier, vol. 20(C), pages 136-151.
    6. Białek-Jaworska Anna & Krawczyk Tomasz, 2019. "Corporate bonds or bank loans? The choice of funding sources and information disclosure of Polish listed companies," Central European Economic Journal, Sciendo, vol. 6(53), pages 262-285, January.
    7. Behr, Patrick & Norden, Lars & Noth, Felix, 2013. "Financial constraints of private firms and bank lending behavior," Journal of Banking & Finance, Elsevier, vol. 37(9), pages 3472-3485.
    8. Ogura, Yoshiaki, 2018. "The objective function of government-controlled banks in a financial crisis," Journal of Banking & Finance, Elsevier, vol. 89(C), pages 78-93.
    9. Isin, Adnan Anil, 2018. "Tax avoidance and cost of debt: The case for loan-specific risk mitigation and public debt financing," Journal of Corporate Finance, Elsevier, vol. 49(C), pages 344-378.
    10. Imai, Masami, 2020. "Government financial institutions and capital allocation efficiency in Japan," Journal of Banking & Finance, Elsevier, vol. 118(C).
    11. Pessarossi, Pierre & Weill, Laurent, 2013. "Choice of corporate debt in China: The role of state ownership," China Economic Review, Elsevier, vol. 26(C), pages 1-16.
    12. Behr, Patrick & Foos, Daniel & Norden, Lars, 2017. "Cyclicality of SME lending and government involvement in banks," Journal of Banking & Finance, Elsevier, vol. 77(C), pages 64-77.
    13. Senra Hodelin, Reynaldo, 2022. "Public banking and economic growth: The experiences of 10 countries since the 1950s until 2017," Economic Systems, Elsevier, vol. 46(1).
    14. João M. Pinto & Mário C. Santos, 2018. "The Choice Between Corporate And Structured Financing: Evidence From New Corporate Borrowings," Working Papers de Gestão (Management Working Papers) 01, Católica Porto Business School, Universidade Católica Portuguesa.
    15. Ririen Setiati Riyanti & Iván Arribas & Silvia Pazzi & Emili Tortosa-Ausina, 2022. "The impacts of static ownership types and governance changes on small business lending: Evidence from Indonesia," Working Papers 2022/13, Economics Department, Universitat Jaume I, Castellón (Spain).
    16. Torres, Ernani & Zeidan, Rodrigo, 2016. "The life-cycle of national development banks: The experience of Brazil's BNDES," The Quarterly Review of Economics and Finance, Elsevier, vol. 62(C), pages 97-104.
    17. Petreski, Aleksandar & Schäfer, Dorothea & Stephan, Andreas, 2023. "The reputation effect of green bond issuance and its impact on the cost of capital," Working Paper Series in Economics and Institutions of Innovation 493, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    18. Xu, Si & He, Xiaoyi & Cao, Chunfang, 2023. "Struggle for survival in credit crunch: The effect of interest rate deregulation in China," China Economic Review, Elsevier, vol. 77(C).
    19. Simon H. Kwan & Willard T. Carleton, 2010. "Financial Contracting and the Choice between Private Placement and Publicly Offered Bonds," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(5), pages 907-929, August.
    20. Janbaz, Mehdi & Hassan, M. Kabir & Floreani, Josanco & Dreassi, Alberto & Jiménez, Alfredo, 2022. "Political risk in banks: A review and agenda," Research in International Business and Finance, Elsevier, vol. 62(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:eti:dpaper:23072. 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: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    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.