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 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...

We develop a bottom-up approach to estimating the slope of the primitive form of the New Keynesian Phillips curve, which features marginal cost as the relevant real activity variable. Using quarterly micro data on prices, costs, and output from the Belgian manufacturing sector, we estimate...

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...

We study the interconnection between the productivity and pricing effects of financial shocks. Combining administrative records on firm-level output prices and quantities with quasi-experimental variation in credit supply, we show that a tightening of credit conditions has a persistent, yet...

We measure the causal effect of negative credit supply shocks on firms' productivity growth, systematically exploring the distinction between the effect on technical productivity growth (TFPQ, the quantity of physical units produced per unit of inputs) and revenue productivity growth (TFPR, the...

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...