How Does Green Credit Affect Corporate Green Investment Efficiency? A Test Based on Listed Corporations in China’s Heavy Pollution Industry

Liyun Liu (), Yefan Liu, Mingming Zhang (), Xinyu Zhou and Jia Huang
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Liyun Liu: Business School, Qingdao University of Technology, Qingdao 266520, China
Yefan Liu: School of Economics and Management, China University of Petroleum (East China), Qingdao 266580, China
Mingming Zhang: School of Economics and Management, China University of Petroleum (East China), Qingdao 266580, China
Xinyu Zhou: State Key Laboratory of Enhanced Oil and Gas Recovery, Research Institute of Petroleum Exploration and Development, CNPC, Beijing 100083, China
Jia Huang: State Key Laboratory of Enhanced Oil and Gas Recovery, Research Institute of Petroleum Exploration and Development, CNPC, Beijing 100083, China

Sustainability, 2025, vol. 17, issue 8, 1-24

Abstract: Green credit significantly aids green industry development and energy transformation. However, can green credit incentivize heavy polluting corporations to accelerate their green transformation? To assess this question, this research analyzed how green credit affects green investment efficiency of heavy polluting corporations. A fixed-effects model was applied to explore the impact, followed by a threshold effect model to assess whether there is a nonlinear relationship under the effect of other factors. The study shows that green credit can significantly improve the green investment efficiency of heavy polluting corporations. From an internal control perspective, this improvement is significant for corporations that are state-owned or have low executive shareholding. From an external regulation perspective, the improvement is significant for the areas with low financial and environmental regulation. Green credit is influenced by the corporate asset–liability ratio and executives’ green thinking; both have non-linear, single-threshold effects on corporate green investment efficiency.

Keywords: green credit; green investment efficiency; the super-SBM model; threshold effect (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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