Can green credit policy increase corporate pollution abatement efforts? Evidence from China

Based on the green credit policy enacted in China since 2012, our study examines the monitoring role of banks in promoting corporate pollution abatement. The results show that the green credit policy has a significantly positive effect on corporate green innovation for polluting firms. Furthermore,...

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Bibliographic Details
Published inInternational review of economics & finance Vol. 93; pp. 797 - 813
Main Authors Lai, Jinming, Liu, Xin, Yuan, Lu
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.06.2024
Subjects
Bank monitoring
Green credit policy
Green innovation
Pollution abatement
The 2012 green credit Guidelines
The 2012 green credit Guidelines
Pollution abatement
Green credit policy
Green innovation
Bank monitoring
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Summary:Based on the green credit policy enacted in China since 2012, our study examines the monitoring role of banks in promoting corporate pollution abatement. The results show that the green credit policy has a significantly positive effect on corporate green innovation for polluting firms. Furthermore, we find that the positive effect is more pronounced when banks substitute institutional investors and media to monitor corporate environmental performance, in the product market of intense peer competition, and in regions where environmental regulatory enforcement is strong. These results suggest that the green credit policy strengthens the monitoring force of banks, thus promoting corporate green transformation and development.
ISSN:1059-0560
DOI:10.1016/j.iref.2024.05.026