Green credit policy and the stock price synchronicity of heavily polluting enterprises

Shuxia Zheng, Xiaoming Zhang and Hu Wang

Economic Analysis and Policy, 2023, vol. 77, issue C, 251-264

Abstract: We take the implementation of green credit guidelines (GCG) as a quasi-natural experiment. Using the annual data of heavily polluting enterprises listed in China from 2008 to 2020, we investigate the relation between green credit policies and the stock price synchronicity of heavily polluting enterprises. The results show that green credit policies increase the stock price synchronicity of heavily polluting enterprises, and that earnings management and financialization play a mediating role in this relationship. Green credit policies increase the stock price synchronicity of heavily polluting enterprises by promoting earnings management and increasing the level of financialization. We supplement the literature on the green credit policies and provide policy guidance for reducing the stock price synchronicity of heavily polluting enterprises, thereby better implementing green credit policies.

Keywords: Green credit guidelines; Stock price synchronicity; Heavily polluting enterprises; Difference-in-differences (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:77:y:2023:i:c:p:251-264

DOI: 10.1016/j.eap.2022.11.011

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