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What effect did the Green Credit Policy have on China's energy or emission intensive firms?

Author

Listed:
  • Qin Zhang
  • Li Xu
  • Keying Wang
  • Xunpeng Shi

Abstract

Purpose - The role of energy or emission intensive firms face contradictory demands from advancing economic development and environmental improvement and protection and thus require appropriate policy interventions to balance the two needs. China's “Green Credit” policy that restricts loans to energy or emission intensive firms provides an example to study the impact of these kinds of policy intervention. Design/methodology/approach - Using the data of all A-share listed companies in Shanghai and Shenzhen stock exchanges, our paper empirically analyzes the impact of the Green Credit Policy on performance of these energy or emission intensive firms. Findings - (1) Using difference-in-difference (DID) and propensity score matching (PSM)-DID method and the dynamic effect method, we found that from 2012 to 2015, the Green Credit Policy had an inhibiting effect on the performance of energy or emission intensive firms. This inhibiting effect was gradually weakened in 2016, and it turned into a positive promoting effect in 2017; (2) The performance's change of these firms around 2015 showed that Green Credit promoted the green transformation and upgrading of these firms; (3) Loans were helpful to the performance of energy or emission intensive firms to some extent, but government subsidies were not significant. Originality/value - The results suggest that the government, banks and other institutions should dynamically assess the implementation results of the Green Credit Policy on energy or emission intensive firms.

Suggested Citation

  • Qin Zhang & Li Xu & Keying Wang & Xunpeng Shi, 2021. "What effect did the Green Credit Policy have on China's energy or emission intensive firms?," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 18(9), pages 2363-2382, July.
    • Handle: RePEc:eme:ijoemp:ijoem-04-2021-0555
    DOI: 10.1108/IJOEM-04-2021-0555
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    Cited by:

    1. Lu, Ling & Liu, Peng & Yu, Jian & Shi, Xunpeng, 2023. "Digital inclusive finance and energy transition towards carbon neutrality: Evidence from Chinese firms," Energy Economics, Elsevier, vol. 127(PB).

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