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Relationship Banking and Corporate Green Investments

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  • Lucas Marchand

    (LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges)

  • Céline Meslier

    (LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges)

  • Amine Tarazi

    (LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges)

Abstract

This paper examines how relationship banking shapes firms' environmental investment decisions. Combining plant-level data on green investments with bank-firm relationship records for French manufacturers, we exploit the 2016 French floods as an exogenous shock to environmental awareness. Our difference-in-differences estimates show that long-term banking ties reduce the likelihood of investing in pollution prevention when firms are more dependent on their main lenders. This pattern reflects the transformative and unconventional nature of these investments, which may challenge banks' accumulated informational capital, particularly when the scale of the required environmental transition is substantial.

Suggested Citation

  • Lucas Marchand & Céline Meslier & Amine Tarazi, 2026. "Relationship Banking and Corporate Green Investments," Working Papers hal-05579390, HAL.
    • Handle: RePEc:hal:wpaper:hal-05579390
    Note: View the original document on HAL open archive server: https://hal.science/hal-05579390v1
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