Can green credit policy promote green total factor productivity? Evidence from China

Abstract

Green credit, a market-driven environmental policy instrument and an essential component of the green financial system, has piqued academic and policymakers' interest in whether it has successfully improved Chinese green total factor productivity (GTFP). Utilizing Chinese province panel data from 2006 to 2019, this study assesses GTFP using the Slack-Based Model with the Global-Malmquist-Luenberger technique and investigates the influence of green credit on GTFP as well as its mechanism. The findings suggest green credit has a favorable influence on China's GTFP. Green credit can boost GTFP through three mechanisms: upgrading industrial structure, stimulating green innovation, and optimizing energy consumption structures. Furthermore, green credit improves GTFP in eastern regions but has little impact elsewhere; the promotion impact is more effective in financial developed regions than in financial underdeveloped regions. As a result, the Chinese government should encourage regionally differentiated green credit policy implementation.

Enhancing green total factor productivity through manufacturing output servitization: A case study in China

“…This illustrates that GTFP plays an important role in modern management as a measurement standard for balancing economic benefits and environmental costs. However, most researchers have mainly studied the impact of exogenous factors on GTFP, such as financial services [ 27 ], international direct investment [ 28 ] and environmental regulation policies [ 29 ]. Therefore, investigating the relationship between manufacturing firms’ output servitization and GTFP from an endogenous perspective and identifying the mechanisms underlying this relationship is necessary.…”

How can green credit decrease social health costs? The mediating effect of the environment

“…Xu and Zhu (24) proved that China's overall green governance index and green financial policies have significantly decreased environmental pollution. In addition, some literature has studied the ways green finance restricts polluting enterprises, which has increased green technology innovations (7,25). Chen et al (26) affirmed that financial development can ease the financing constraints faced by innovative activities and promote green technological innovation.…”

“…As China has industrialized, infrastructure construction and the heavy chemical industry have consumed large amounts of mineral resources and fossil fuels and have had an important impact on people's health. Thus, the health of Chinese households is directly related to the rapid development of resource-intensive industries as a result of traditional credit (7). China proposed supply-side structural reform in 2015, hoping to optimize the allocation of financial resources and improve residents' health.…”

Does green credit policy promote corporate green innovation? Evidence from China

“…From a macro perspective, according to signal theory, the GCP can transmit green development signals through the credit channel (Cheng et al 2022 ). The GCP mobilizes capital accumulation by reallocating financial resources, such as credit inclinations and differentiated interest rates, and uses a capital scale-oriented mechanism to provide capital elements for green economic recovery and promote green investment (Li et al 2023 ). From a micro-perspective, the new growth theory emphasizes the importance of knowledge.…”