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Can the green credit policy stimulate green innovation in heavily polluting enterprises? Evidence from a quasi-natural experiment in China

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  • Hu, Guoqiang
  • Wang, Xiaoqi
  • Wang, Yu

Abstract

This paper investigates the effect of the green credit policy (GCP) on green innovation in heavily polluting enterprises (HPEs) using the promulgation of the “Green Credit Guidelines” (2012 Guidelines) policy in China as a quasi-natural experiment. The findings show that the 2012 Guidelines have had a positive and significant effect on the green patent output of HPEs, especially HPEs under stronger financial constraints. Furthermore, this positive effect occurred predominantly in HPEs with higher expected sunk costs or noncompliance costs, more intense product market competition, and state ownership. These results suggest that the GCP can stimulate green innovation in HPEs by exerting credit constraints, thus achieving green transformation in an emerging economy.

Suggested Citation

  • Hu, Guoqiang & Wang, Xiaoqi & Wang, Yu, 2021. "Can the green credit policy stimulate green innovation in heavily polluting enterprises? Evidence from a quasi-natural experiment in China," Energy Economics, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:eneeco:v:98:y:2021:i:c:s0140988321000396
    DOI: 10.1016/j.eneco.2021.105134
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    More about this item

    Keywords

    Green credit policy; Green innovation; Heavily polluting company; Financial constraints; Porter hypothesis; China;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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