Green credit policy and corporate deleveraging: Evidence from China

Cong Li, Yiming Wang, Weiguo Sun, Yue Yu and Yuzhen Ding

Finance Research Letters, 2024, vol. 66, issue C

Abstract: Green Credit Policy (GCP) plays a dual role in environmental protection and financial regulation. Its effectiveness in driving enterprises to deleverage is of great significance in accelerating the development transition. This paper uses the difference-in-differences method to investigate the impact of the Green Credit Guidelines (GCG) on corporate deleveraging in Chinese A-share listed companies between 2007 and 2021. The results show that GCP has a driving effect on enterprise deleveraging. The mechanism tests indicate that corporate leverage ratio can be reduced by increasing financing constraints and reducing the financial distress risk. The findings offer policy implications for promoting high-quality economic development.

Keywords: Green credit policy; Deleveraging; Financing constraints; Financial distress risk (search for similar items in EconPapers)
JEL-codes: G34 G38 Q58 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612324007244
Full text for ScienceDirect subscribers only

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:eee:finlet:v:66:y:2024:i:c:s1544612324007244

DOI: 10.1016/j.frl.2024.105694

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().