Matti Keloharju

Abstract:
Do bankers treat green firms differently, and if so, how? To address these questions, we analyze unique firm loan application and banker preference data from a mid-sized bank. We find customer managers (i.e., front-line bankers) give more favorable recommendations on the loan applications of green firms. Greenness matters more when applications are handled by managers with more intense green values. Brown managers ‘’virtue-signal’’ greenness on green loan applicants when their recommendations do not matter and shade their recommendations when they do. Brown loan officers, who are the managers ‘superiors, push back on managers’ recommendations on green applications by downgrading them.

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