In the race against climate change, financial intermediaries hold a key role in rapidly redirecting resources towards greener economic activities. However, this transition entails a dilemma for banks: entry of innovative and green firms in polluting industries risks devaluating legacy positions...

In the race against climate change, financial intermediaries hold a key role in rapidly redirecting resources towards greener economic activities. However, this transition entails a dilemma for banks: entry of innovative and green firms in polluting industries risks devaluating legacy positions...

Investors face reduced incentives to finance projects that devalue their legacy investments. We formalize this "asset overhang" and study its drivers. We apply our framework to the climate-banking nexus, where the net-zero transition effectively poses a dilemma for banks: while environmental...

Environmental technologies threaten dirty legacy portfolios of external financiers. "Asset overhang" refers to an investor’s incentive not to finance disruptive green firms in an attempt to protect exposed legacy positions. Empirically, asset overhang renders green disruptors up to 4.4...

In a production network, shocks originating in individual sectors do not remain confined to individual sectors but permeate through the pricing chain. The notion of "pipeline pressures" alludes to this cascade effect. In this paper we provide a structural definition of pipeline pressures to...

Amiti and Weinstein (2013) develop a new methodology to identify bank-supply shocks using matched bank–firm credit data. We show, using the Frisch–Waugh theorem, that their methodology is equivalent to a weighted least squares regression and suggest applicability in other research areas

In a production network, shocks originating in individual sectors do not remain confined to individual sectors but permeate through the pricing chain. The notion of “pipeline pressures” alludes to this cascade effect. In this paper we provide a structural definition of pipeline pressures to...