Green credit policy and firm performance: What we learn from China

Abstract

contents lists available at sciencedirect energy economics journal homepage: www.elsevier.com/locate/eneeco green credit policy and firm performance: what we learn from china shouyu yao a, e, yuying pan b, ahmet sensoy c, gazi salah uddin d, feiyang cheng a, e,* a college of management and economics, tianjin university, china b school of finance, shandong university of finance and economics, china c faculty of business administration, bilkent university, turkey d department of management and engineering, linkoping university, sweden e macquarie business school, macquarie university, australia a r t i c l e i n f o a b s t r a c t keywords: green credit policy firm performance financial constraints investment china we explore the effect of green credit policy on firm performance of listed firms in china. we find that green credit policy reduces firm performance in heavily polluting industries. this effect is more prominent in state- owned enterprises, firms with large size, high institutional ownership, high analyst coverage and during high economic policy uncertainty period. moreover, we observe that green credit policy decreases heavily polluting firms’ performance by increasing firm financing constraints and decreasing investment level. our results help to restrain heavily polluting enterprises and promote industrial transformation in developing markets. 1. introduction transformation. resource depletion and environmental pollution are becoming increasingly serious, and …

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