The green advantage: mapping the profit power of green credit in commercial banks
Yamin Li () and
Guo Wu ()
Additional contact information
Yamin Li: East China Normal University
Guo Wu: Sanda University
Economic Change and Restructuring, 2025, vol. 58, issue 2, No 12, 29 pages
Abstract:
Abstract We examine the positive effect of green credit on bank profitability using firm-level data from Chinese A-share listed commercial banks during 2007–2022. We specifically delve into the income and cost effect channels both theoretically and empirically. The findings reveal that: (1) The significant positive effect of green credit on bank profitability is primarily through the income effect, while the anticipated cost effect remains undetected; (2) the results are robust across multiple tests and endogeneity treatments; (3) the positive effect of green credit is significant for small banks but is not evident among state-owned and joint-stock banks; (4) the difference-in-differences (DID) analysis indicates that the green credit policy issued by China’s central bank effectively enhances commercial banks’ profitability. We also discuss valuable insights for both banks and policymakers.
Keywords: Green credit; Bank profitability; DID; Income effect; Cost effect (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:
Downloads: (external link)
http://link.springer.com/10.1007/s10644-025-09869-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
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:kap:ecopln:v:58:y:2025:i:2:d:10.1007_s10644-025-09869-0
Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/10644/PS2
DOI: 10.1007/s10644-025-09869-0
Access Statistics for this article
Economic Change and Restructuring is currently edited by George Hondroyiannis
More articles in Economic Change and Restructuring from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().