Green credit regulation, induced R&D and green productivity: Revisiting the Porter Hypothesis

Dongyang Zhang

International Review of Financial Analysis, 2021, vol. 75, issue C

Abstract: This paper investigates the causal effect of green credit regulation policy on green productivity and revisits the Porter hypothesis. By separating R&D into environmentally induced R&D and production R&D, we find that green credit regulation policy significantly improves green total factor productivity (GTFP) growth rather than input-output TFP. We further show that environmentally induced R&D is the driver of GTFP, while production R&D significantly improves the input-output TFP. Finally, our estimations indicate that internal financing intermediation is used to finance environmental R&D projects due to the high cost of environmental innovation.

Keywords: Green credit regulation; Production R&D; Induced R&D; Green productivity; Porter hypothesis (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (75)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:75:y:2021:i:c:s1057521921000661

DOI: 10.1016/j.irfa.2021.101723

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