IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v56y2024i57p7757-7776.html
   My bibliography  Save this article

Green credit, uncertainty and corporate pollution emissions

Author

Listed:
  • Zhenyu Ma
  • Junbo Wang
  • Zehua Xiao

Abstract

The Chinese government introduced the green credit policy (GCP) in 2007 to address deteriorating ecological conditions. Using an enterprise-heterogeneity dynamic stochastic general equilibrium (DSGE) model that includes a financial accelerator mechanism, uncertainty shocks, and GCP, we reveal that GCP significantly reduces emissions. However, this effect is inhibited by rising external uncertainty, as evidenced by the findings from impulse response and welfare loss analyses. Additionally, this negative effect and inhibition are more pronounced for privately-owned enterprises (POEs) while muted for state-owned enterprises (SOEs). Moreover, this study presents that uncertainty weakens the role of GCP through two channels: tightening firms’ financing constraints and discouraging investment. Building upon the theoretical analysis above, we validate our findings by employing detailed firm-level data and the difference-in-differences (DID) method. The empirical results confirm the robustness of our findings. This study offers theoretical and quantitative support for developing GCP in China.

Suggested Citation

  • Zhenyu Ma & Junbo Wang & Zehua Xiao, 2024. "Green credit, uncertainty and corporate pollution emissions," Applied Economics, Taylor & Francis Journals, vol. 56(57), pages 7757-7776, December.
    • Handle: RePEc:taf:applec:v:56:y:2024:i:57:p:7757-7776
    DOI: 10.1080/00036846.2023.2288053
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2023.2288053
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2023.2288053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:56:y:2024:i:57:p:7757-7776. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.