XF-FQ1HZ4Y-N Does climate change affect bank lending behavior?
Abstract
We examine how banks adjust credit supply in areas with higher exposure to climate risks by utilizing the province-level air pollution and loan growth data of a large emerging market, Turkey, following the Paris Agreement in 2015. Our results show that banks limit their credit extension to more polluted provinces in the post-agreement interval, implying that banks consider climate change-related risks and adjust their credit provisioning accordingly. Our baseline findings are intact against a myriad of robustness checks. We also find that the shift in the climate risk-credit provisioning nexus is asymmetric depending on the levels of air pollution.
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Cites (5)
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- Carbon emissions and the bank-lending channel (2022) Abstract
- Do investors care about carbon risk? (2021)
- Borrowers under water! rare disasters, regional banks, and recovery lending (2020) Abstract
- Institutional investors' Views and Preferences On Climate Risk Disclosure (2020) Abstract
- Being stranded with fossil fuel reserves? climate policy risk and the pricing of bank loans (2019) Abstract
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Elsevier (Journal of Financial Economics) (2022). Does climate change affect bank lending behavior?. XFID: XF-FQ1HZ4Y-N. Retrieved from https://xframework.id/XFFQ1HZ4YN
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