Green credit policy and corporate access to bank loans in China: The role of environmental disclosure and green innovation

Chao Xing, Yuming Zhang and David Tripe

International Review of Financial Analysis, 2021, vol. 77, issue C

Abstract: This research assesses the effectiveness of China's green credit policy. We explore whether firms with better external environmental disclosure and internal green innovation receive more bank loans because of green credit, and utilize a panel of 1086 listed Chinese manufacturing enterprises from 2012 to 2017 to test our hypotheses. The results suggest that firms with higher environmental disclosure quality do not obtain more loans, and only green innovation promotes access to corporate loans. We show that the underlying cause of this phenomenon is corporate green-washing, which is prevalent in soft environmental disclosure and hinders enterprises from obtaining more loans. Our findings contribute to the literature on green credit policy, corporate green innovation, environmental disclosure, and green-washing, and provide a reference for companies, banks, and governments to make decisions.

Keywords: Green credit policy; Environmental disclosure; Green innovation; Bank loan; Green-washing (search for similar items in EconPapers)
JEL-codes: G21 G32 O16 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (91)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:77:y:2021:i:c:s105752192100171x

DOI: 10.1016/j.irfa.2021.101838

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