Can green financial development promote renewable energy investment efficiency? A consideration of bank credit

Lingyun He, Rongyan Liu, Zhangqi Zhong (), Deqing Wang and Yufei Xia

Renewable Energy, 2019, vol. 143, issue C, 974-984

Abstract: Taking 141 listed renewable energy enterprises in China as a sample, the Richardson model is adopted to measure their investment efficiency in this paper. On this basis, an intermediary effect model of panel data is constructed to empirically analyze the intermediary effect of green financial development on renewable energy investment efficiency through bank loans, short-term loans, and long-term loans. We find that China’s green financial development has a negative impact on bank loan issuance in general, and inhibits the improvement of renewable energy investment efficiency to a certain extent, with an effect degree of 0.0017. Besides, the short-term loan has few intermediate effect on investment efficiency, while there is no intermediary effect of long-term loans. Moreover, as for the over-investment renewable energy enterprises, intermediary effect of bank loans exists. Green financial development can inhibit over-investment in renewable energy by reducing bank credit issuance; for renewable energy companies of under-investment, on the contrary, it aggravates the under-investment to a certain extent. This paper suggests that the government should both construct and consummate the green financial system through policies and regulation. Financial institutions should actively produce innovative green financial products and support the development of renewable energy enterprises and the renewable energy enterprises should strengthen their internal management and develop financing channels.

Keywords: Green finance; Bank credit; Investment efficiency; Renewable energy investment (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (137)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:143:y:2019:i:c:p:974-984

DOI: 10.1016/j.renene.2019.05.059

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