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

Qin Zhang (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, China)
Li Xu (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, China)
Keying Wang (Center of Hubei Cooperative Innovation for Emissions Trading System, Hubei University of Economics, Wuhan, China)
Xunpeng Shi (Australia-China Relations Institute, University of Technology Sydney, Haymarket, Australia)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 15 July 2021

361

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.

Keywords

Acknowledgements

This work was supported in part by the National Science Foundation of China (71774081, 71828401, 71373122, 71834003).

Citation

Zhang, Q., Xu, L., Wang, K. and Shi, X. (2021), "What effect did the Green Credit Policy have on China's energy or emission intensive firms?", International Journal of Emerging Markets, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJOEM-04-2021-0555

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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