Can green credit policy alleviate inefficient investment of heavily polluting enterprises? A quasi-natural experiment based on the Green Credit Guidelines

Cong Li, Jiaxuan Liu, Yunxu Zhou, Benshuo Yang and Jiawen Sun

Finance Research Letters, 2024, vol. 59, issue C

Abstract: Using the formal implementation of the 2012 Green Credit Guidelines (GCG) as an exogenous shock to construct a quasi-natural experiment, we study the impact of green credit policies on the inefficient investment of heavily polluting enterprises in China's listed enterprises from 2008 to 2020. We find that green credit policies can significantly alleviate the inefficient investment of heavily polluting enterprises. By reducing agency costs and long-term debts, green credit policies alleviate inefficient investment in heavily polluting enterprises. Moreover, the alleviating effect of green credit policies on the inefficient investment has significant heterogeneity in terms of property rights, internal characteristics.

Keywords: Green credit guidelines; Inefficient investment; Agent costs; Long-term debt (search for similar items in EconPapers)
JEL-codes: G34 G38 Q58 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011558

DOI: 10.1016/j.frl.2023.104783

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