Promoting green development through collateral-based monetary policy

Renzhi Li

Economics Letters, 2024, vol. 241, issue C

Abstract: This paper explores the causal effects of collateral-based monetary policy on green development. The results reveal that the collateral-based monetary policy can significantly promote green development. Mechanism tests indicate that the policy boosts green development by alleviating firms’ financing constraints, increasing their risk-taking, and allocating more resources to R&D. Additionally, the positive effect is more pronounced for firms with good corporate governance and those located in regions with strict environmental regulations. Further analysis finds that the policy also stimulates firm carbon emission performance and overall productivity, supporting its positive effects on green development.

Keywords: Green development; Collateral-based monetary policy; Medium-term lending facilities; Carbon emission performance (search for similar items in EconPapers)
JEL-codes: E59 G3 Q55 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524003318

DOI: 10.1016/j.econlet.2024.111847

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