Green credit policy, technological innovation, and corporate financial performance: Evidence from the energy industry

Kingsley E. Dogah, Presley K. Wesseh and Samuel Adomako

Business Strategy and the Environment, 2025, vol. 34, issue 1, 1171-1188

Abstract: Despite extensive research on the impact of green policies on firm growth and performance, there has been little effort dedicated to understanding the effect of green credit policies on firms. In this article, we fill this gap by investigating the effect of green credit policy on financial performance. Additionally, we examine the moderating role of technological innovation in this relationship. Using data from listed companies in the energy sector, our findings reveal that green credit policies negatively affect financial performance. However, this negative impact is ameliorated at a high level of technological innovation (e.g., high‐technology and green patents). Specifically, the mechanism analysis reveals enterprises with high‐tech invention patents convey positive prospects to investors, whereas green patents signal firms' green innovation capabilities, thereby attracting external financing. Moreover, our findings revealed that environmental performance attenuates the negative effect of green credit policy on financial performance. Our heterogeneity analysis reveals that invention patents significantly benefit the financial performance of state‐owned and large enterprises in the traditional energy sector, whereas green patents have a positive effect in the new energy sector, predominantly for non‐state‐owned and smaller companies. These findings offer both theoretical and policy implications for sustainability research and practice.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/bse.4041

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:34:y:2025:i:1:p:1171-1188

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1002/(ISSN)1099-0836

Access Statistics for this article

Business Strategy and the Environment is currently edited by Richard Welford

More articles in Business Strategy and the Environment from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().