Green Credit Policies and the Devaluation of Pollution-Intensive Enterprises: A Quasi-Natural Experiment

Weidong Huo and Bingwen Wang ()
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Weidong Huo: Division of Economics, Liaoning University, Shenyang 110036, China
Bingwen Wang: School of Finance and Trade, Liaoning University, Shenyang 110036, China

Sustainability, 2025, vol. 17, issue 5, 1-21

Abstract: We investigate the impact of green credit policies on pollution-intensive enterprises from a new perspective. Empirically, we utilize the issuance of China’s green credit policy in 2012 to construct a quasi-natural experiment. The results show that green credit policies can significantly reduce the market value of pollution-intensive enterprises. Furthermore, our analysis of profitability and R&D investment shows that the decline in market value is driven by real financial deterioration rather than short-term investor reactions. The results indicate that green credit policies can effectively suppress pollution-intensive enterprises. Additionally, the results also suggest that China’s stock market reasonably prices environmental risks.

Keywords: pollution-intensive enterprises; market valuation mechanisms; green credit policy transmission; corporate sustainability performance; China’s A-share market; environmental regulation effects (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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