Green Credit Policy and Investment Decisions: Evidence from China

Xiaoting Ling, Lijuan Yan and Deming Dai
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Xiaoting Ling: Renmin Business School, Renmin University of China, Beijing 100872, China
Lijuan Yan: Management College, Beijing Union University, Beijing 100101, China
Deming Dai: Renmin Business School, Renmin University of China, Beijing 100872, China

Sustainability, 2022, vol. 14, issue 12, 1-22

Abstract: Previous studies have reported mixed results on the effect of the green credit policy on firms’ behaviors. Investment decision making is one of the most important elements of firms’ behaviors, but few studies have discussed the relationship between the green credit policy and firms’ investment decisions. Therefore, this paper explores the effect of green credit policy on firms’ investment decisions. Using Chinese listed firms from 2008 to 2020, we found that the green credit policy tended to reduce pollutant-emitting firms’ investment level but increases pollutant-emitting firms’ investment efficiency; this effect was more pronounced in state-owned firms, firms with high-quality corporate governance, and those with a higher analyst following. This paper contributes to the literature on the economic consequences of the green credit policy and can help commercial banks and other financial institutions allocate green credits more effectively.

Keywords: green credit policy; investment level; investment efficiency; property rights; corporate governance; analyst following (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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