Share:


Can the green credit policy promote green innovation in enterprises? Empirical evidence from China

    Xubing Fang Affiliation
    ; Maotao Liu Affiliation
    ; Guangqin Li Affiliation

Abstract

The green credit policy (GCP) is an institutional framework aimed at guiding enterprises towards green transformation and promoting high-quality development, which serves as a crucial tool for supporting the establishment of a green technology innovation system. In this study, utilizing the green credit guidelines as a quasi-natural experiment and constructed a continuous difference-in-difference (DID) model, examines the impact of GCP impact on enterprise green innovation and its internal mechanisms by analyzing data from Chinese A-share listed companies between 2006 and 2021. Our findings indicate that the GCP had a significant impact on enterprise green innovation, inhibiting companies from in-dependently developing green innovation while promoting joint green innovation with other institutions; These results were robust and consistent, even after conducting several sensitiv-ity analyses; This mechanism indicate that the commercial credit plays an important regulatory role in the process of GCP affecting green innovation of enterprises and the financing constraints act as an intermediary factor in the process of GCP affecting green innovation. Based on our research, we offer policy recommendations aimed at improving the GCP and fostering a market-oriented green technology innovation system.


First published online 14 March 2024

Keyword : green credit policy, green innovation, commercial credit, financing constraints

How to Cite
Fang, X., Liu, M., & Li, G. (2024). Can the green credit policy promote green innovation in enterprises? Empirical evidence from China. Technological and Economic Development of Economy, 30(4), 899–932. https://doi.org/10.3846/tede.2024.20497
Published in Issue
May 29, 2024
Abstract Views
815
PDF Downloads
515
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Abakah, E. J. A., Nasreen, S., Tiwari, A. K., & Lee, C. C. (2023). US leveraged loan and debt markets: Implications for optimal portfolio and hedging. International Review of Financial Analysis, 87, Article 102514. https://doi.org/10.1016/j.irfa.2023.102514

Acemoglu, D., Akcigit, U., Hanley, D., & Kerr, W. (2016). Transition to clean technology. Journal of Political Economy, 124(1), 52–104. https://doi.org/10.1086/684511

Aghion, P., Dechezleprêtre, A., Hemous, D., Martin, R., & Van Reenen, J. (2016). Carbon taxes, path dependency, and directed technical change: Evidence from the auto industry. Journal of Political Economy, 124(1), 1–51. https://doi.org/10.1086/684581

An, S., Li, B., Song, D., & Chen, X. (2021). Green credit financing versus trade credit financing in a supply chain with carbon emission limits. European Journal of Operational Research, 292(1), 125–142. https://doi.org/10.1016/j.ejor.2020.10.025

Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173

Chapman, K., Miller, G. S., & White, H. D. (2019). Investor relations and information assimilation. The Accounting Review, 94(2), 105–131. https://doi.org/10.2308/accr-52200

Cheng, F., Wang, C., Chiao, C., Yao, S., & Fang, Z. (2021). Retail attention, retail trades, and stock price crash risk. Emerging Markets Review, 49, Article 100821. https://doi.org/10.1016/j.ememar.2021.100821

Cui, X., Wang, P., Sensoy, A., Nguyen, D. K., & Pan, Y. (2022). Green credit policy and corporate productivity: Evidence from a quasi-natural experiment in China. Technological Forecasting and Social Change, 177, Article 121516. https://doi.org/10.1016/j.techfore.2022.121516

Fan, H., Peng, Y., Wang, H., & Xu, Z. (2021). Greening through finance? Journal of Development Economics, 152, Article 102683. https://doi.org/10.1016/j.jdeveco.2021.102683

Francis, J., & Smith, A. (1995). Agency costs and innovation some empirical evidence. Journal of Accounting and Economics, 19(2–3), 383–409. https://doi.org/10.1016/0165-4101(94)00389-M

Gao, W., & Liu, Z. (2023). Green credit and corporate ESG performance: Evidence from China. Finance Research Letters, 55(B), Article 103940. https://doi.org/10.1016/j.frl.2023.103940

He, L., Liu, R., Zhong, Z., Wang, D., & Xia, Y. (2019a). Can green financial development promote renewable energy investment efficiency? A consideration of bank credit. Renewable Energy, 143, 974–984. https://doi.org/10.1016/j.renene.2019.05.059

He, L., Zhang, L., Zhong, Z., Wang, D., & Wang, F. (2019b). Green credit, renewable energy investment and green economy development: Empirical analysis based on 150 listed companies of China. Journal of Cleaner Production, 208, 363–372. https://doi.org/10.1016/j.jclepro.2018.10.119

Houston, J. F., & Shan, H. (2022). Corporate ESG profiles and banking relationships. The Review of Financial Studies, 35(7), 3373–3417. https://doi.org/10.1093/rfs/hhab125

Hu, G., Wang, X., & Wang, Y. (2021). Can the green credit policy stimulate green innovation in heavily polluting enterprises? Evidence from a quasi-natural experiment in China. Energy Economics, 98, Article 105134. https://doi.org/10.1016/j.eneco.2021.105134

Khanna, M., Quimio, W. R. H., & Bojilova, D. (1998). Toxics release information: A policy tool for environmental protection. Journal of Environmental Economics and Management, 36(3), 243–266. https://doi.org/10.1006/jeem.1998.1048

Lee, C. C., & Lee, C. C. (2022). How does green finance affect green total factor productivity? Evidence from China. Energy Economics, 107, Article 105863. https://doi.org/10.1016/j.eneco.2022.105863

Lee, C. C., Chang, Y. F., & Wang, E. Z. (2022b). Crossing the rivers by feeling the stones: The effect of China’s green credit policy on manufacturing firms’ carbon emission intensity. Energy Economics, 116, Article 106413. https://doi.org/10.1016/j.eneco.2022.106413

Lee, C. C., Qin, S., & Li, Y. (2022a). Does industrial robot application promote green technology innovation in the manufacturing industry? Technological Forecasting and Social Change, 183, Article 121893. https://doi.org/10.1016/j.techfore.2022.121893

Lee, C. C., Wang, F., & Chang, Y. F. (2023a). Does green finance promote renewable energy? Evidence from China. Resources Policy, 82, Article 103439. https://doi.org/10.1016/j.resourpol.2023.103439

Lee, C. C., Wang, F., & Chang, Y. F. (2023b). Towards net-zero emissions: Can green bond policy promote green innovation and green space? Energy Economics, 121, Article 106675. https://doi.org/10.1016/j.eneco.2023.106675

Liu, X., Wang, E., & Cai, D. (2019). Green credit policy, property rights and debt financing: Quasi-natural experimental evidence from China. Finance Research Letters, 29, 129–135. https://doi.org/10.1016/j.frl.2019.03.014

Lu, Y., Gao, Y., Zhang, Y., & Wang, J. (2022). Can the green finance policy force the green transformation of high-polluting enterprises? A quasi-natural experiment based on “Green Credit Guidelines”. Energy Economics, 114, Article 106265. https://doi.org/10.1016/j.eneco.2022.106265

Luo, S., Yu, S., & Zhou, G. (2021). Does green credit improve the core competence of commercial banks? Based on quasi-natural experiments in China. Energy Economics, 100, Article 105335. https://doi.org/10.1016/j.eneco.2021.105335

Lv, C., Fan, J., & Lee, C. C. (2023). Can green credit policies improve corporate green production efficiency? Journal of Cleaner Production, 397, Article 136573. https://doi.org/10.1016/j.jclepro.2023.136573

Nabeeh, N. A., Abdel-Basset, M., & Soliman, G. (2021). A model for evaluating green credit rating and its impact on sustainability performance. Journal of Cleaner Production, 280, Article124299. https://doi.org/10.1016/j.jclepro.2020.124299

Porter, M. (1996). America’s green strategy. Business and the Environment: A Reader, 33.

Reghezza, A., Altunbas, Y., Marques-Ibanez, D., d’Acri, C. R., & Spaggiari, M. (2022). Do banks fuel climate change? Journal of Financial Stability, 62, Article 101049. https://doi.org/10.1016/j.jfs.2022.101049

Scholtens, B., & Dam, L. (2007). Banking on the Equator. Are banks that adopted the Equator Principles different from non-adopters? World Development, 35(8), 1307–1328. https://doi.org/10.1016/j.worlddev.2006.10.013

Stucki, T., Woerter, M., Arvanitis, S., Peneder, M., & Rammer, C. (2018). How different policy instruments affect green product innovation: A differentiated perspective. Energy Policy, 114, 245–261. https://doi.org/10.1016/j.enpol.2017.11.049

Su, C. W., Li, W., Umar, M., & Lobonţ, O. R. (2022a). Can green credit reduce the emissions of pollutants? Economic Analysis and Policy, 74, 205–219. https://doi.org/10.1016/j.eap.2022.01.016

Su, C. W., Umar, M., & Gao, R. (2022b). Save the environment, get financing! How China is protecting the environment with green credit policies? Journal of Environmental Management, 323, Article 116178. https://doi.org/10.1016/j.jenvman.2022.116178

Sun, C., & Zeng, Y. (2023). Does the green credit policy affect the carbon emissions of heavily polluting enterprises? Energy Policy, 180, Article 113679. https://doi.org/10.1016/j.enpol.2023.113679

Sun, H., Edziah, B. K., Kporsu, A. K., Sarkodie, S. A., & Taghizadeh-Hesary, F. (2021). Energy efficiency: The role of technological innovation and knowledge spillover. Technological Forecasting and Social Change, 167, Article 120659. https://doi.org/10.1016/j.techfore.2021.120659

Taghizadeh-Hesary, F., & Yoshino, N. (2019). The way to induce private participation in green finance and investment. Finance Research Letters, 31, 98–103. https://doi.org/10.1016/j.frl.2019.04.016

Tan, X., Xiao, Z., Liu, Y., Taghizadeh-Hesary, F., Wang, B., & Dong, H. (2022a). The effect of green credit policy on energy efficiency: Evidence from China. Technological Forecasting and Social Change, 183, Article 121924. https://doi.org/10.1016/j.techfore.2022.121924

Tan, X., Yan, Y., & Dong, Y. (2022b). Peer effect in green credit induced green innovation: An empirical study from China’s Green Credit Guidelines. Resources Policy, 76, Article 102619. https://doi.org/10.1016/j.resourpol.2022.102619

Tiwari, A. K., Abakah, E. J. A., Adewuyi, A. O., & Lee, C. C. (2022). Quantile risk spillovers between energy and agricultural commodity markets: Evidence from pre and during COVID-19 outbreak. Energy Economics, 113, Article 106235. https://doi.org/10.1016/j.eneco.2022.106235

Tombe, T., & Winter, J. (2015). Environmental policy and misallocation: The productivity effect of intensity standards. Journal of Environmental Economics and Management, 72, 137–163. https://doi.org/10.1016/j.jeem.2015.06.002

Wang, C. W., Lee, C. C., & Wu, L. T. (2023). The relationship between cash flow uncertainty and extreme risk: International evidence. Pacific-Basin Finance Journal, 77, Article 101927. https://doi.org/10.1016/j.pacfin.2022.101927

Wang, H., Qi, S., Zhou, C., Zhou, J., & Huang, X. (2022). Green credit policy, government behavior and green innovation quality of enterprises. Journal of Cleaner Production, 331, Article 129834. https://doi.org/10.1016/j.jclepro.2021.129834

Wang, Y., Lei, X., Long, R., & Zhao, J. (2020). Green credit, financial constraint, and capital investment: Evidence from China’s energy-intensive enterprises. Environmental Management, 66(6), 1059–1071. https://doi.org/10.1007/s00267-020-01346-w

Wang, Z., & Wang, X. (2022). Research on the impact of green finance on energy efficiency in different regions of China based on the DEA-Tobit model. Resources Policy, 77, Article 102695. https://doi.org/10.1016/j.resourpol.2022.102695

Wen, H., Lee, C. C., & Zhou, F. (2021). Green credit policy, credit allocation efficiency and upgrade of energy-intensive enterprises. Energy Economics, 94, Article 105099. https://doi.org/10.1016/j.eneco.2021.105099

Xing, C., Zhang, Y., & Tripe, D. (2021). Green credit policy and corporate access to bank loans in China: The role of environmental disclosure and green innovation. International Review of Financial Analysis, 77, Article 101838. https://doi.org/10.1016/j.irfa.2021.101838

Xu, X., & Li, J. (2020). Asymmetric impacts of the policy and development of green credit on the debt financing cost and maturity of different types of enterprises in China. Journal of Cleaner Production, 264, Article 121574. https://doi.org/10.1016/j.jclepro.2020.121574

Yao, S., Pan, Y., Sensoy, A., Uddin, G. S., & Cheng, F. (2021). Green credit policy and firm performance: What we learn from China. Energy Economics, 101, Article 105415. https://doi.org/10.1016/j.eneco.2021.105415

Yin, W., Zhu, Z., Kirkulak-Uludag, B., & Zhu, Y. (2021). The determinants of green credit and its impact on the performance of Chinese banks. Journal of Cleaner Production, 286, Article 124991. https://doi.org/10.1016/j.jclepro.2020.124991

Zhang, A., Deng, R., & Wu, Y. (2022a). Does the green credit policy reduce the carbon emission intensity of heavily polluting industries? Evidence from China’s industrial sectors. Journal of Environmental Management, 311, Article 114815. https://doi.org/10.1016/j.jenvman.2022.114815

Zhang, K., Li, Y., Qi, Y., & Shao, S. (2021b). Can green credit policy improve environmental quality? Evidence from China. Journal of Environmental Management, 298, Article 113445. https://doi.org/10.1016/j.jenvman.2021.113445

Zhang, S., Wu, Z., He, Y., & Hao, Y. (2022b). How does the green credit policy affect the technological innovation of enterprises? Evidence from China. Energy Economics, 113, Article 106236. https://doi.org/10.1016/j.eneco.2022.106236

Zhang, S., Wu, Z., Wang, Y., & Hao, Y. (2021a). Fostering green development with green finance: An empirical study on the environmental effect of green credit policy in China. Journal of Environmental Management, 296, Article 113159. https://doi.org/10.1016/j.jenvman.2021.113159

Zhou, F., Wen, H., & Lee, C. C. (2022). Broadband infrastructure and export growth. Telecommunications Policy, 46(5), Article 102347. https://doi.org/10.1016/j.telpol.2022.102347