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

Research output: Contribution to journalArticlepeer-review

236 Citations (Scopus)


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 languageEnglish
Article number105415
Pages (from-to)1-16
Number of pages16
JournalEnergy Economics
Publication statusPublished - Sept 2021


  • Green credit policy
  • Firm performance
  • Financial constraints
  • Investment
  • China


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