Does green finance promote the social responsibility fulfilment of highly polluting enterprises? – empirical evidence from China

This study explores whether and how the development of green finance can facilitate the social responsibility of highly polluting enterprises. We conducted a quasi-natural experiment in 2017 in five Chinese provinces (districts), based on the establishment of green finance reform and innovation pilot zones. The research samples were China’s A-share heavy pollution-industry-listed companies from 2013 to 2020, and the difference in differences model was used to examine the relationship between green finance and social responsibility fulfilment of highly polluting firms. The mediating and moderating effects of financial constraints and media monitoring were also discussed. The findings indicate that the advancement of green finance significantly improves the level of social responsibility fulfilment of highly polluting firms, particularly in the area of environmental responsibility. Furthermore, strengthened financing constraints partially mediate the aforementioned relationship, and media monitoring positively moderates the facilitation effect of green finance development on highly polluting firms’ social responsibility fulfilment. Our study demonstrates that a higher degree of financing constraints is an important channel for establishing a green finance reform and innovation pilot zone to force enterprises to fulfilment their social responsibility, and provides theoretical support for governments and enterprises to better understand the policy effects.