Environmental performance of firms and access to bank loans

Hongtao Shen, Huiying Wu, Wenbin Long*, Le Luo

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This study examines whether better environmental performance of a firm facilitates its access to bank loans in China and how state ownership and regional environmental pollution moderate this relationship. Using a sample of Chinese firms listed on the Shanghai or Shenzhen stock exchanges from 2007 to 2015, we find that better environmental performance is associated with greater access to bank loans, which is consistent with the predictions of risk-management theory. Furthermore, we find that the relationship between environmental performance and access to bank loans is weakened for state-owned firms and strengthened for firms operating in the regions with higher environmental pollution, suggesting that institutional factors play an important role when banks make lending decisions. Our results have implications for managers, policymakers, and banks in the transition to a green economy.

Original languageEnglish
Article number2150007
Pages (from-to)2150007-1-2150007-37
Number of pages37
JournalThe International Journal of Accounting
Issue number2
Early online date23 Apr 2021
Publication statusPublished - Jun 2021


  • Environmental performance
  • access to bank loans
  • environmental risk
  • ownership structure
  • regional environmental pollution


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