From Green to Gold: the cash management impact of China’s new diversified green finance policy

Ping Lin, Dixin Cai (), Qingfeng Geng () and Junbing Xu ()
Additional contact information
Ping Lin: Minjiang University
Dixin Cai: Minjiang University
Qingfeng Geng: Minjiang University
Junbing Xu: Minjiang University

Palgrave Communications, 2025, vol. 12, issue 1, 1-14

Abstract: Abstract Amidst escalating concerns over climate change and worsening air pollution, green finance has garnered considerable interest from academics and policymakers. In contrast to previous green finance policies that relied on a single financial instrument, Chinese government implemented the Green Financial Reform and Innovation Pilot Zones (GFRIPZ) policy in 2017, a new diversified green finance policy. Our paper examines whether green finance from GFRIPZ policy affects firm cash holdings, known as the firm “lifeblood”. The findings document that the firms located in cities implementing GFRIPZ policy hold fewer cash holdings than other firms do after policy year. Specifically, green finance reduces firm cash holdings by 8.54% of the sample mean. Additionally, this effect is attributed to relaxation of credit constraints, or enhancement of sustainable transformation, and this effect would be enhanced by a high informal credit market, high internal governance, high operational stability. Overall, this paper reveals the firm cash holding effects of a new diversified green finance policy from developing countries, which provides empirical evidence for sustainable development.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41599-025-05621-1 Abstract (text/html)
Access to full text is restricted to subscribers.

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:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05621-1

Ordering information: This journal article can be ordered from
https://www.nature.com/palcomms/about

DOI: 10.1057/s41599-025-05621-1

Access Statistics for this article

More articles in Palgrave Communications from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().