Green credit policy and firm performance: What we learn from China

Shouyu Yao; Yuying Pan; Ahmet Sensoy; Gazi Salah Uddin; Feiyang Cheng

doi:10.1016/j.eneco.2021.105415

Green credit policy and firm performance: What we learn from China

Shouyu Yao, Yuying Pan, Ahmet Sensoy, Gazi Salah Uddin, Feiyang Cheng^*

^*Corresponding author for this work

Macquarie Business School

Research output: Contribution to journal › Article › peer-review

326 Citations (Scopus)

Abstract

We explore the effect of green credit policy on firm performance of listed firms in China. We find that green credit policy reduces firm performance in heavily polluting industries. This effect is more prominent in stateowned enterprises, firms with large size, high institutional ownership, high analyst coverage and during high economic policy uncertainty period. Moreover, we observe that green credit policy decreases heavily polluting firms' performance by increasing firm financing constraints and decreasing investment level. Our results help to restrain heavily polluting enterprises and promote industrial transformation in developing markets.

Original language	English
Article number	105415
Pages (from-to)	1-16
Number of pages	16
Journal	Energy Economics
Volume	101
DOIs	https://doi.org/10.1016/j.eneco.2021.105415
Publication status	Published - Sept 2021

Keywords

Green credit policy
Firm performance
Financial constraints
Investment
China

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10.1016/j.eneco.2021.105415

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title = "Green credit policy and firm performance: What we learn from China",

abstract = "We explore the effect of green credit policy on firm performance of listed firms in China. We find that green credit policy reduces firm performance in heavily polluting industries. This effect is more prominent in stateowned enterprises, firms with large size, high institutional ownership, high analyst coverage and during high economic policy uncertainty period. Moreover, we observe that green credit policy decreases heavily polluting firms' performance by increasing firm financing constraints and decreasing investment level. Our results help to restrain heavily polluting enterprises and promote industrial transformation in developing markets.",

keywords = "Green credit policy, Firm performance, Financial constraints, Investment, China",

author = "Shouyu Yao and Yuying Pan and Ahmet Sensoy and Uddin, {Gazi Salah} and Feiyang Cheng",

year = "2021",

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AU - Yao, Shouyu

AU - Pan, Yuying

AU - Sensoy, Ahmet

AU - Uddin, Gazi Salah

AU - Cheng, Feiyang

PY - 2021/9

Y1 - 2021/9

N2 - We explore the effect of green credit policy on firm performance of listed firms in China. We find that green credit policy reduces firm performance in heavily polluting industries. This effect is more prominent in stateowned enterprises, firms with large size, high institutional ownership, high analyst coverage and during high economic policy uncertainty period. Moreover, we observe that green credit policy decreases heavily polluting firms' performance by increasing firm financing constraints and decreasing investment level. Our results help to restrain heavily polluting enterprises and promote industrial transformation in developing markets.

AB - We explore the effect of green credit policy on firm performance of listed firms in China. We find that green credit policy reduces firm performance in heavily polluting industries. This effect is more prominent in stateowned enterprises, firms with large size, high institutional ownership, high analyst coverage and during high economic policy uncertainty period. Moreover, we observe that green credit policy decreases heavily polluting firms' performance by increasing firm financing constraints and decreasing investment level. Our results help to restrain heavily polluting enterprises and promote industrial transformation in developing markets.

KW - Green credit policy

KW - Firm performance

KW - Financial constraints

KW - Investment

KW - China

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JO - Energy Economics

JF - Energy Economics

M1 - 105415

ER -

Green credit policy and firm performance: What we learn from China

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Keywords

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