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Environmental regulation, green credit, and corporate environmental investment

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  • Han, Xinyu
  • Cai, Qihua

Abstract

Using China's A-share listed companies from 2008 to 2020, this paper empirically investigates the relationship between environmental regulation and corporate environmental investment, and the moderating effect of green credit on this relationship. The paper finds that environmental regulation effectively fosters corporate environmental investment and that green credit positively moderates this relationship. Robustness testing confirms that this conclusion is valid. Further analyses reveal that the efficacy of environmental regulation varies based on the industry characteristics of the company, the location of the company, and the type of property rights it possesses. The effect is more significant for heavily polluting companies, companies in the central and western regions, and non-state-owned companies than for companies of other natures. This paper presents empirical support for assessing the efficiency of environmental regulation, adds a green credit perspective to the mechanism through which macro policy influences corporate behavior, and finally puts forward some suggestions for optimizing China's environmental regulation policies.

Suggested Citation

  • Han, Xinyu & Cai, Qihua, 2024. "Environmental regulation, green credit, and corporate environmental investment," Innovation and Green Development, Elsevier, vol. 3(3).
    • Handle: RePEc:eee:ingrde:v:3:y:2024:i:3:s2949753124000122
    DOI: 10.1016/j.igd.2024.100135
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    References listed on IDEAS

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    Cited by:

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    2. Chen, Mo & Xue, Wei-Xian & Zhao, Xin-Xin & Chang, Chun-Ping & Liu, Xiaoxia, 2024. "The impact of economic sanctions on the COVID-19 pandemic," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 163-174.
    3. Wang, Quan-Jing & Sharma, Susan Sunila & Ni, Guo-Hua & Chang, Chun-Ping, 2024. "Governance, energy utilization and environmental protection: Role of extreme events," Energy Economics, Elsevier, vol. 136(C).
    4. Wen, Jun & Yin, Hua-Tang & Chang, Chun-Ping & Tang, Kai, 2024. "How AI shapes greener futures: Comparative insights from equity vs debt investment responses in renewable energy," Energy Economics, Elsevier, vol. 136(C).
    5. Long, Han & Prasad, Biman & Krishna, Victor & Tang, Kai & Chang, Chun-Ping, 2024. "Understanding the key determinants of Fiji's renewable energy," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1144-1157.
    6. Huang, Xiaobing & Xie, Jiawei, 2024. "Impact of green credit policies on the global value chain position of heavy polluting enterprises," Energy Policy, Elsevier, vol. 192(C).
    7. Wang, Jun-Zhuo & Feng, Gen-Fu & Chang, Chun-Ping, 2024. "How does political instability affect renewable energy innovation?," Renewable Energy, Elsevier, vol. 230(C).
    8. Sui, Bo & Sharma, Susan Sunila & Yao, Liu-Yang & Ni, Guo-Hua & Chang, Chun-Ping, 2024. "Does aging affect renewable energy? The role of extreme events and economic development," Energy Economics, Elsevier, vol. 133(C).
    9. Ping‐Chuan Jiang & Gen‐Fu Feng & Hai‐Jie Wang & Chun‐Ping Chang, 2024. "CSR from different perspectives: The global ESG indexes updated," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4694-4714, September.
    10. Chen, Xia & Zhang, Huimin & Zhao, Xin Xin & Gong, Qiang & Chang, Chun-Ping, 2024. "Do renewable energy investment and financial development mitigate climate change?," Journal of Asian Economics, Elsevier, vol. 93(C).
    11. Ting Pan & Boqiang Lin, 2025. "Is the green credit policy useful for improving energy intensity? Evidence from cities in China," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-29, December.
    12. Chen, Di & Hu, Haiqing & Wang, Ning & Chang, Chun-Ping, 2024. "The impact of green finance on transformation to green energy: Evidence from industrial enterprises in China," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    13. Chen, Lu & Ma, Yan & Feng, Gen-Fu & Chang, Chun-Ping, 2024. "Does environmental governance mitigate the detriment of greenwashing on innovation in China?," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).

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