Can green credit policy stimulate firms’ green investments?
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2024-03-01
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Green credit policy, a market-oriented green financial tool, aims to achieve simultaneous economic development and environmental protection. Utilizing china's 2012 green credit policy as a quasi-natural experiment, this paper employs a difference-in-differences method to explore its causal impact on Chinese firms' green investment behavior. The empirical results indicate that the green credit policy significantly stimulates the green investments of firms in pollution-intensive sectors compared to those in non-pollution-intensive sectors. This finding remains robust across various tests, including parallel trends, dynamic effects, confounding factors, and alternative methods. Furthermore, the green investment-induced effect is reinforced by the supplementary green credit policy introduced in 2018. The heterogeneity effect reveals that the green credit policy facilitates the green investments of firms with undisclosed environmental information. Additionally, the study finds that the green investment-induced effects are more pronounced among firms with soft financial constraints, limited access to government subsidies, state-owned firms, and larger sizes. These findings shed light on the crucial role of green finance policy in promoting green recovery, suggesting that the government should increase the provision of green credit in terms of quantity and scope.
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Ma, Y, L Lu, J Cui and X Shi (2024). Can green credit policy stimulate firms’ green investments?. International Review of Economics and Finance, 91. pp. 123–137. 10.1016/j.iref.2024.01.009 Retrieved from https://hdl.handle.net/10161/31588.
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Jingbo Cui
Bio: Dr. Jingbo Cui is a tenured Associate Professor of Applied Economics at the Division of Social Sciences, Co-Director at the Environmental Research Center, and Director of Graduate Studies for the International Master of Environmental Policy (iMEP) program at Duke Kunshan University, with a Secondary Faculty Appointment at the Nicholas School of the Environment at Duke University.
Dr. Cui's research centers on Environmental Economics, Climate Innovation, and the Economics of Climate Change and Policy. His recent research leverages causal inference methods, data science algorithms (e.g., LLMs and NLP), and GIS tools to explore topics such as the drivers and obstacles to global climate innovation, the economic and environmental impacts of China's climate policy, and the identification and quantification of the financial consequences of climate risks in China.
His scholarly contributions have been published in top-tier academic journals, including PNAS, AER P&P, Journal of the Association of Environmental and Resource Economists (JAERE), Journal of Environmental Economics and Management (JEEM), American Journal of Agricultural Economics, Environmental and Resource Economics, and others. He has served as a Co-Editor for Weather, Climate and Society under the American Meteorological Society, an Associate Editor for Environment and Development Economics, and a member of the editorial councils at JAERE and JEEM.
His research projects on China's Climate Policy and Climate Innovation have been funded by the NSFC of China. Nature Climate Change Highlight reports and world-leading media, including the Financial Times, Nature News in Focus, BBC Worklife, the South Chian Morning Post, and others, have covered his research and perspectives on climate policy and energy transition.
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