Green financial policy and corporate risk-taking: Evidence from China

Hong Deng, You Li and Yongjia Lin

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: This study investigates the impact of green financial policy on corporate risk-taking, based on data from China's A-share listed companies during 2012–2020. Exploiting a quasi-natural experiment in China, the Green Financial Reform and Innovation Pilot Zones (GFRIPZ), we find that green financial policy has a positive effect on corporate risk-taking. Our analysis shows that the primary effect operates through two channels: reducing agency costs and alleviating financial constraints. The increase in risk-taking is particularly pronounced among companies with low R&D investment and poor ESG performance. This research provides insights for designing more effective environmental programs in emerging economies.

Keywords: Green finance policy; Green financial reform and innovation pilot zones (GFRIPZ); Corporate risk-taking (search for similar items in EconPapers)
JEL-codes: G31 G38 M10 Q01 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007535

DOI: 10.1016/j.frl.2023.104381

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