Boosting green recovery: Green credit policy in heavily polluted industries and stock price crash risk

Yongbo Ge and Yuexiao Zhu

Resources Policy, 2022, vol. 79, issue C

Abstract: With increasing resource consumption and waste, green financing has become an important means to achieve green recovery. The purpose of this paper is to investigate the effect of green financing on behavioral decision-making in heavily polluted industries that rely on natural resources. Using Green Credit Guidelines as a shock, this paper constructs a DID model and finds that green finance policy reduces the future crash risk of heavily polluting listed firms. This association is more pronounced in firms with weaker internal controls, lower audit quality, and a higher level of marketization. Further analyses show that information transparency and information efficiency are crucial economic channels. The findings of this paper are conducive to green recovery and transformation of the energy industry, thus saving resources.

Keywords: Green finance; Green recovery; Stock price crash risk; Resources (search for similar items in EconPapers)
JEL-codes: G10 G14 G18 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:79:y:2022:i:c:s0301420722005013

DOI: 10.1016/j.resourpol.2022.103058

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