Green credit policy, property rights and debt financing: Quasi-natural experimental evidence from China

Liu, Xinghe; Wang, Enxian; Cai, Danting

doi:10.1016/j.frl.2019.03.014

Cited by 317 publications

(117 citation statements)

References 8 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This is because banks prefer the ecological modernization characteristics of SMEMEs, which include higher operational efficiency, less greenwashing, and more direct financial support, which can not only improve the ecology but also promote the economy. This finding contributes to the previous literature on green credit policy, in which the direct impacts of the policy on corporate bank loans, environmental investment, and environmental performance are the main considerations [6,13,16,17], while less consideration is given to the SMEMEs. Our conclusion provides a deeper insight into China's green credit policy and, thus, can provide policymakers, banks, and enterprises with an additional reference for their decision making and the realization of the sustainability objective.…”

Section: Conclusion and Discussionsupporting

confidence: 67%

“…Nevertheless, recent empirical studies show that the green credit policy indeed achieves environmental protection and the distribution of loan resources; hence, the policy is successful in general. For instance, in line with the view that banks will reduce financing support for highly polluting enterprises to avoid legitimate environmental risks [29], Liu et al (2019) show that the loan amount and maturity for China's highly polluting enterprises are lower after the implementation of the green credit policy [13]. Based on these results, Xing et al (2020) demonstrate that the financing constraints of enterprises with higher green performance are alleviated by the green credit policy [4].…”

Section: Ecological Modernization Theory and The Green Credit Policymentioning

confidence: 83%

“…As the green credit policy can be regarded as an exogenous shock, the quasi-natural experiment method is more efficient to evaluate the policy impact [13]. Previous empirical studies on the policy mainly used the difference in difference (DID) model, which includes treated group (impacted by the policy) and controlled group (unaffected by the policy) [13,17,27]. Theoretically, the DID model is a typical quasi-natural experiment tool that can detect the effect of a policy by comparing different groups in different periods [27].…”

Section: Data and Modelsmentioning

confidence: 99%

“…Therefore, for SMEMEs, the green credit policy mainly impacts the loan amount rather than other loan contract terms such as interest rate or maturity. Thus, consistent with Liu et al (2019) and [4,13], we utilize two indicators to measure corporate loan size, which are the dependent variables: first, Amount is the current total bank loans that the firm holds divided by the total debt. Second, AmountFlow is the amount of new bank loans that are granted in the corresponding year divided by the total debt.…”

Section: Variablesmentioning

confidence: 99%

“…Studies in the field of green credit policy focus mainly on its direct effects on polluting and non-polluting firms. For example, studies show that the policy can improve (weaken) eco-friendly (eco-unfriendly) firms' financing conditions by adjusting the loan amount granted, loan interest, and loan maturity [5,13]. Second, the green credit policy can further impact corporate investment decisions, thereby resulting in more green investment activities [6,14].…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Redistribution of China’s Green Credit Policy among Environment-Friendly Manufacturing Firms of Various Sizes: Do Banks Value Small and Medium-Sized Enterprises?

Zhang

Xing

Tripe

2020

IJERPH

View full text Add to dashboard Cite

According to previous studies, China’s green credit policy, which was launched in 2012, increases environment-friendly manufacturing enterprises’ loan amounts. In this paper, we focus on a redistribution mechanism among environment-friendly manufacturing firms, namely, we determine whether the effects of the green credit policy differ between small and medium-sized environment-friendly manufacturing enterprises (SMEMEs) and large environment-friendly manufacturing enterprises (LEMEs). Using a difference in difference model (DID) and a difference in difference in difference model (DDD), we find that SMEMEs obtain more loans than LEMEs due to the green credit policy. We further analyze three potential foundations of this redistribution mechanism: information asymmetry, financial development, and government environmental investment. The results demonstrate that the redistribution effect occurs in both low and high information asymmetry conditions but only in regions with satisfactory financial development and with lower government environmental investment. Our findings enrich the literature on green credit, sustainable finance, and small finance, and they provide references for enterprises, banks, and governments.

show abstract

Section: Conclusion and Discussionsupporting

confidence: 67%

Section: Ecological Modernization Theory and The Green Credit Policymentioning

confidence: 83%

Section: Data and Modelsmentioning

confidence: 99%

Section: Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Redistribution of China’s Green Credit Policy among Environment-Friendly Manufacturing Firms of Various Sizes: Do Banks Value Small and Medium-Sized Enterprises?

Zhang

Xing

Tripe

2020

IJERPH

View full text Add to dashboard Cite

show abstract

Corporate environmental information disclosure and bank financing: Moderating effect of formal and informal institutions

Ruan

Shi

et al. 2022

Bus Strat Env

View full text Add to dashboard Cite

This paper investigates the effect of the quality of environmental information disclosure of firms on their bank financing and further examines the moderating effect of formal and informal institutions on this effect using China as a laboratory. We find that the quality of environmental information disclosure is positively (negatively) related to the scale (cost) of bank financing. Furthermore, the formal institution (proxied by the official issuance of the Green Credit Guidelines) strengthens the above relationship. Moreover, the informal institution (proxied by bank connection) weakens the association between the quality of environmental information disclosure and bank financing. Our results are valid after addressing the potential endogeneity between environmental information disclosure and bank financing and remain unchanged in various robustness tests. Our findings affirm the decision usefulness of corporate environmental information disclosure that can be used by companies as an effective strategy for obtaining bank financing and the ethical integrity of borrowers to banks as an important group of capital market participants.

show abstract

The philanthropic response of substantive and symbolic corporate social responsibility strategies to COVID‐19 crisis: Evidence from China

Zhong

Zhao

Shahab

2021

Corp Soc Responsibility Env

View full text Add to dashboard Cite

The COVID‐19 epidemic broke out in China in January 2020, which triggered the largest wave of corporate philanthropic donations since the 2008 Sichuan earthquake. Based on A‐share listed firms in the Shanghai and Shenzhen stock exchanges in 2020, we study whether substantive and symbolic corporate social responsibility (CSR) strategies affect corporate philanthropic responses during the COVID‐19 crisis. We use the lagged annual donation and technical dimension scores (T scores) of rankins ratings (RKS) as proxies of CSR performance and CSR disclosure and then define the CSR gap as the gap between the two. The results show that substantive and symbolic strategies cause firms to have material differential responses in the COVID‐19 crisis. Specifically, the CSR gap is negatively related to the possibility and the level of crisis donation. In addition, (1) this difference is more pronounced in the earlier period of the COVID‐19 crisis; (2) the negative correlation is more pronounced in private firms; and (3) the crisis donation of firms with either strategy obtains no different response from the capital market. Our evidence suggests that the established CSR strategy influences the substantive response of Chinese firms to public emergencies, but their substantive response does not result in different reactions in the capital market.

show abstract

Green credit policy, property rights and debt financing: Quasi-natural experimental evidence from China

Cited by 317 publications

References 8 publications

Redistribution of China’s Green Credit Policy among Environment-Friendly Manufacturing Firms of Various Sizes: Do Banks Value Small and Medium-Sized Enterprises?

Redistribution of China’s Green Credit Policy among Environment-Friendly Manufacturing Firms of Various Sizes: Do Banks Value Small and Medium-Sized Enterprises?

Corporate environmental information disclosure and bank financing: Moderating effect of formal and informal institutions

The philanthropic response of substantive and symbolic corporate social responsibility strategies to COVID‐19 crisis: Evidence from China

Contact Info

Product

Resources

About