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Do green credit guidelines impact on heavily polluting firms in rent-seeking?

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  • Zhong, Qian
  • Han, Liyan
  • Jin, Jiayu

Abstract

We investigate how green credit regulation impacts on realizing procedural justice and substantive justice in reducing rent-seeking by analyzing the Chinese firms. We show clear regulation in implementing green credit could effectively suppress rent-seeking of heavily polluting firms for getting loans, which embodies the procedural justice in credit distribution. For realizing this procedure justice, green financing constraints and external supervision are identified as two potential channels. Furthermore, the regulation promotes the innovation of heavily polluting firms, demonstrating the substantive justice of green credit.

Suggested Citation

  • Zhong, Qian & Han, Liyan & Jin, Jiayu, 2022. "Do green credit guidelines impact on heavily polluting firms in rent-seeking?," Finance Research Letters, Elsevier, vol. 47(PB).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322000678
    DOI: 10.1016/j.frl.2022.102747
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