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The impacts of green credit policy on green innovation of high-polluting enterprises in China

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  • Li, Wei
  • Cheng, Huihui
  • He, Junhe
  • Song, Yufei
  • Bu, Hui

Abstract

This paper assesses the effects of the Green Credit Guidelines (GCG) 2012 on the green innovation of high-polluting enterprises (HPEs) in China. We find a significant increase in utility patents following the GCG 2012, indicating a surge in incremental green innovation. However, the policy's impact on invention patents remains marginal, pointing to a dominant trend of compliance-oriented innovation rather than fundamental technological breakthroughs. We find there is long-term effect of GCG 2012 which may be attributable to the enhanced rigor of policy implementation. Additionally, we document that HPEs reduced financial asset investments in anticipation of more stringent credit conditions.

Suggested Citation

  • Li, Wei & Cheng, Huihui & He, Junhe & Song, Yufei & Bu, Hui, 2024. "The impacts of green credit policy on green innovation of high-polluting enterprises in China," Finance Research Letters, Elsevier, vol. 62(PA).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pa:s1544612324001971
    DOI: 10.1016/j.frl.2024.105167
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    Cited by:

    1. Peng, Changhong & Zhang, Shuqin & Rong, Xueyun & Chen, Dongjing, 2024. "Is China's green credit policy effective? -Based on the perspective of enterprise environmental performance and economic performance," International Review of Economics & Finance, Elsevier, vol. 94(C).

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    More about this item

    Keywords

    Green credit policy; Green innovation; Patents granted; Financial assets allocation;
    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

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