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Brutscher, Philipp-Bastian, Ravillard, Pauline and Semieniuk, Gregor (2020) 'Do Energy Efficient Firms Have Better Access to Finance?' The Energy Journal, 42 (6). (Forthcoming)

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Abstract

Improving energy efficiency quickly is key to mitigating climate change and requires improvements implemented in firms. As these require upfront investments, good access to external finance is important. Theory suggests that information asymmetries may prevent lenders from including energy efficiency into their lending assessment, even though higher energy efficiency increases firm cost-competitiveness and its collateral value. Empirically, little is known about the impact of energy efficiency on access to external finance. For the first time, we examine empirically the effect of a firm’s higher energy efficiency on their ability to obtain loans in European Union countries by exploiting a unique firm-level dataset. We find that energy efficiency has no effect on the ability of a firm to obtain external financing compared to other indicators on the financial or operational health of the firm. The results reveal an unexploited potential for energy efficiency policy to signal when firms are energy efficient.

Item Type: Journal Article
SOAS Departments & Centres: Departments and Subunits > Department of Economics
ISSN: 01956574
DOI (Digital Object Identifier): https://doi.org/10.5547/01956574.42.6.pbru
Date Deposited: 06 Jan 2021 18:08
URI: https://eprints.soas.ac.uk/id/eprint/34657

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