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Adoption of green technology with financial friction

DOI zum Zitieren der Version auf EPub Bayreuth: https://doi.org/10.15495/EPub_UBT_00008238
URN to cite this document: urn:nbn:de:bvb:703-epub-8238-4

Title data

Herweg, Fabian:
Adoption of green technology with financial friction.
In: Finance Research Letters. Vol. 71 (2025) . - 106388.
ISSN 1544-6123
DOI der Verlagsversion: https://doi.org/10.1016/j.frl.2024.106388

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Abstract

We investigate firms’ incentives to adopt green technology. To cover the adoption costs, a firm needs a bank loan. The bank cannot observe firms’ adoption costs and offers a loan contract that allows it to earn an intermediation margin. The Pigouvian tax leads to optimal abatement but inefficiently low adoption. The first-best outcome is achieved via a combination of environmental tax and loan subsidy. If the regulator is restricted to an environmental tax, it faces a trade-off between optimal adoption and optimal abatement. In this case, the second-best tax rate exceeds the Pigouvian tax rate.

Further data

Item Type: Article in a journal
Keywords: Abatement technology; Financing constraint; Green investment; Pigouvian taxation
DDC Subjects: 300 Social sciences > 330 Economics
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VIII - International Competition Policy > Chair Economics VIII - International Competition Policy - Univ.-Prof. Dr. Fabian Herweg
Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VIII - International Competition Policy
Language: English
Originates at UBT: Yes
URN: urn:nbn:de:bvb:703-epub-8238-4
Date Deposited: 19 Feb 2025 08:49
Last Modified: 19 Feb 2025 08:49
URI: https://epub.uni-bayreuth.de/id/eprint/8238
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