IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v143y2025ics0264999324003341.html
   My bibliography  Save this article

Heterogeneity in the effect of green financing constraints on labor investment efficiency: A causal forest approach

Author

Listed:
  • Liu, Tingwen
  • Liu, Jie
  • Cheng, Tzu-Chang Forrest

Abstract

This study evaluates the heterogeneous effects of green credit policy on labor investment efficiency. We analyze Chinese listed firms from 2005 to 2020 using the difference-in-differences method and causal forest approach based on the introduction of the 2012 Green Credit Guidelines. Our results show that this policy improves labor investment efficiency in high-polluting firms by reducing over-investment. Causal forest analyses reveal nonlinear and heterogeneous treatment effects, indicating that firms with lower market capitalization, lower liquidity, and higher leverage experience efficiency declines due to financial constraints. Faced with severe agency problems, state-owned enterprises and firms with high employment variability and abnormal investment achieve significant efficiency gains. Finally, despite lower innovation among high-polluting firms following policy implementation, the increased labor investment efficiency mitigates this impact. Overall, the heterogeneity analysis using causal forests highlights the groups most significantly affected by the policy.

Suggested Citation

  • Liu, Tingwen & Liu, Jie & Cheng, Tzu-Chang Forrest, 2025. "Heterogeneity in the effect of green financing constraints on labor investment efficiency: A causal forest approach," Economic Modelling, Elsevier, vol. 143(C).
    • Handle: RePEc:eee:ecmode:v:143:y:2025:i:c:s0264999324003341
    DOI: 10.1016/j.econmod.2024.106977
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999324003341
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2024.106977?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Green credit policy; Labor investment efficiency; Causal forests; Financing constraints; Agency conflicts; Innovation;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:143:y:2025:i:c:s0264999324003341. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.