Lost in Transition: Financial Barriers to Green Growth by Maarten de Ridder

Join us for this weeks Macroeconomics Research Seminar, Autumn Term 2023.

Maarten de Ridder, will present this weeks Macroeconomics seminar on Lost in Transition: Financial Barriers to Green Growth.

Abstract

The share of climate-enhancing innovations in total patents was booming in the years leading up to the Global Financial Crisis but has seized to grow since.  We provide causal evidence that tight credit disproportionately affects green innovation, through its effect on young firms.  To explain this, we develop a quantitative framework in which firms’ direct innovation towards green or polluting technologies, and become better at innovating in technologies that they have previously succeeded in. This means that mature, incumbent firms predominantly innovate in polluting technologies. When green technologies become more attractive, e.g., due to a carbon tax, young firms are responsible for a disproportionate share of the transition to green innovation. As young firms are financially constrained, a credit shock disproportionately harms their innovation, bringing the green transition to a halt.

This seminar will be held on campus in the Economics Common Room at 1.30pm on Tuesday 10 October 2023. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.