Small and medium-sized banks and pollution emissions from industrial enterprises

Mei Jiang, Kedi Wang, Qiuyun Zhao, Siqi Li and Guifu Xu

International Review of Economics & Finance, 2025, vol. 97, issue C

Abstract: Drawing upon the theory of comparative advantage of small and medium-sized banks, this paper employs pollution data from industrial enterprises in China spanning 2000 to 2014. Utilizing the establishment of urban commercial bank branches in counties as a quasi-natural experiment, we investigate the impact of the development of small and medium-sized banks on industrial enterprises' pollutant emissions and the underlying mechanisms of this effect. Our findings reveal that the establishment of urban commercial bank branches in counties significantly reduces wastewater and sulfur dioxide emissions from enterprises, a result that remains robust across various tests. Further heterogeneity analyses show that this pollution reduction effect is more pronounced for small and medium-sized, more finance-constrained, start-up firms, and firms located in areas with low carbon pilots and higher levels of marketisation. The analysis of the impact mechanism suggests that the establishment of urban commercial banks achieves this reduction by increasing enterprise output, thereby diluting pollution intensity, and fostering green technological innovation, which enhances pollution treatment capabilities. Additionally, our research highlights that government intervention significantly influences the pollution reduction effect of urban commercial banks and the mode of this influence.

Keywords: Theory of small and medium-sized bank dominance; Small and medium-sized banks; industrial enterprises; Pollutant emissions (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056024007706
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:reveco:v:97:y:2025:i:c:s1059056024007706

DOI: 10.1016/j.iref.2024.103778

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().