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Promoting green development through collateral-based monetary policy

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  • Li, Renzhi

Abstract

This paper explores the causal effects of collateral-based monetary policy on green development. The results reveal that the collateral-based monetary policy can significantly promote green development. Mechanism tests indicate that the policy boosts green development by alleviating firms’ financing constraints, increasing their risk-taking, and allocating more resources to R&D. Additionally, the positive effect is more pronounced for firms with good corporate governance and those located in regions with strict environmental regulations. Further analysis finds that the policy also stimulates firm carbon emission performance and overall productivity, supporting its positive effects on green development.

Suggested Citation

  • Li, Renzhi, 2024. "Promoting green development through collateral-based monetary policy," Economics Letters, Elsevier, vol. 241(C).
    • Handle: RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524003318
    DOI: 10.1016/j.econlet.2024.111847
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    References listed on IDEAS

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    More about this item

    Keywords

    Green development; Collateral-based monetary policy; Medium-term lending facilities; Carbon emission performance;
    All these keywords.

    JEL classification:

    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • G3 - Financial Economics - - Corporate Finance and Governance
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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