Green finance policy and digital transformation of heavily polluting firms: Evidence from China

Shibin Li and Qian Wang

Finance Research Letters, 2023, vol. 55, issue PA

Abstract: In this paper, we use the “Green Credit Performance Evaluation of Banking Depository Financial Institutions” implemented by the People's Bank of China as a quasi-natural experiment and a difference-in-differences (DID) approach to examine the impact of green finance policy on the digital transformation of heavily polluting firms. The results show that firms' digital transformation is effectively driven by green finance policy. The policy effect is more pronounced among low financing-constrained firms, state-owned firms, and firms with high analyst coverage. Furthermore, green finance policy influences the digital transformation of firms primarily by increasing digital outcomes and guiding management's strategic direction.

Keywords: Central bank; Green finance policy; Digital transformation; Heavily polluting firms (search for similar items in EconPapers)
JEL-codes: G30 Q50 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002489

DOI: 10.1016/j.frl.2023.103876

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