Redistribution of China’s Green Credit Policy among Environment-Friendly Manufacturing Firms of Various Sizes: Do Banks Value Small and Medium-Sized Enterprises?

Yuming Zhang, Chao Xing and David Tripe
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Yuming Zhang: School of Management, Shandong University, Jinan 250100, China
Chao Xing: School of Management, Shandong University, Jinan 250100, China
David Tripe: School of Economics and Finance, Massey University, Palmerston North 4442, New Zealand

IJERPH, 2020, vol. 18, issue 1, 1-28

Abstract: According to previous studies, China’s green credit policy, which was launched in 2012, increases environment-friendly manufacturing enterprises’ loan amounts. In this paper, we focus on a redistribution mechanism among environment-friendly manufacturing firms, namely, we determine whether the effects of the green credit policy differ between small and medium-sized environment-friendly manufacturing enterprises (SMEMEs) and large environment-friendly manufacturing enterprises (LEMEs). Using a difference in difference model (DID) and a difference in difference in difference model (DDD), we find that SMEMEs obtain more loans than LEMEs due to the green credit policy. We further analyze three potential foundations of this redistribution mechanism: information asymmetry, financial development, and government environmental investment. The results demonstrate that the redistribution effect occurs in both low and high information asymmetry conditions but only in regions with satisfactory financial development and with lower government environmental investment. Our findings enrich the literature on green credit, sustainable finance, and small finance, and they provide references for enterprises, banks, and governments.

Keywords: green credit; environment-friendly manufacturing enterprises; small and medium-sized enterprises; banks loans; China (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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