Can Lending Hierarchies Balance Bias? The Role of Personal Environmental Values in Credit to Green Firms

Di Bu et al.

Journal of Financial and Quantitative Analysis2026https://doi.org/10.1017/s0022109025102561article
FT50AJG 4ABDC A*
Weight
0.50

Abstract

How do bankers treat green firms? Using unique loan application and banker preference data from a mid-sized bank, we find that customer managers, serving as front-line bankers, give more favorable recommendations to green firms, especially when they hold green values themselves. However, a minority of environmentally skeptical loan officers, aware through internal training that customer managers generally have greener preferences, counter this by downgrading positive evaluations of green firms. Despite not knowing the customer manager’s identity, these officers use their discretion to mitigate what they perceive as green biases, demonstrating the significant moderating role of superiors within the bank’s hierarchy.

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https://doi.org/https://doi.org/10.1017/s0022109025102561

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@article{di2026,
  title        = {{Can Lending Hierarchies Balance Bias? The Role of Personal Environmental Values in Credit to Green Firms}},
  author       = {Di Bu et al.},
  journal      = {Journal of Financial and Quantitative Analysis},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1017/s0022109025102561},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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