Young Scholars
June 19, 2023

Shan Ge
Assistant Professor of Finance
New York University, Stern School of Business
From the abstract:
We study whether divestment policies are an effective tool to address climate change, using coal lending bans by banks around the world as a laboratory. In contrast to theories arguing divestment is ineffective because capital is highly substitutable, we find large effects of these policies. We first develop a comprehensive measure of the strength of such bans, and document a large heterogeneity along this dimension. Using a shift-share instrument combining the lending ban strength measure and timing with borrower-bank relationships, we document that divestment affects the financing and operation of coal assets. We observe large effects of the policies on coal firm loan issuances, as well as on their outstanding debt and total assets. Substitution between divesting lenders and non-divesting ones, as well as with bond and equity issuances, appears to be limited. Coal power plants owned by firms exposed to bank divestment policies are more likely to be retired.
Can Finance Save the World? Measurement and Effects of Coal Divestment Policies by Banks (Paper)
Young Scholars
E-axes Forum © 2020-23
Cookie | Duration | Description |
---|---|---|
cookielawinfo-checkbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checkbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |
"*" indicates required fields