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Can the Superposition of Green Policies Improve the Investment Efficiency of High-Polluting Firms Even More?

Author

Listed:
  • Xiaoyu Liu

    (Qingdao University)

  • Yanan Li

    (Qingdao University)

  • Xiao Zhang

    (Qingdao University)

Abstract

We explore the effect of overlapping green policies on investment efficiency of listed firms in China, by regarding the dual policies of green credit and low-carbon city pilot in 2012 as a quasi-natural experiment. The results show that the superposition of green policies can more significantly improve investment efficiency of high-polluting firms than the green policy alone. In addition to limiting credit availability and increasing financial constraints, green policies also influence firms’ ESG ratings, encourage green upgrading and transformation, and increase green investment to promote firm investment efficiency. Further research finds that green policies significantly contribute to investment efficiency improvements for state-owned firms, large-scale firms, firms with higher long-term debt, and capital-intensive firms. Therefore, coordinated green policies provide an opportunity to achieve a win-win situation of “pollution control” and “efficiency improvement”.

Suggested Citation

  • Xiaoyu Liu & Yanan Li & Xiao Zhang, 2024. "Can the Superposition of Green Policies Improve the Investment Efficiency of High-Polluting Firms Even More?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(10), pages 2773-2794, October.
    • Handle: RePEc:kap:enreec:v:87:y:2024:i:10:d:10.1007_s10640-024-00903-9
    DOI: 10.1007/s10640-024-00903-9
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    References listed on IDEAS

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    More about this item

    Keywords

    Environmental protection; Green policy; Green credit; Investment efficiency; Low-carbon city pilot;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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