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, Adjunct Professor and Ph.D. Supervisor at the School of Economics and Management at Wuhan University. Before the current position, he was a Chu-Tian Junior Scholar from the Department of Education in Hubei Province, an Associate Professor at the School of Economics and Management at Wuhan University, a Post-doctoral Research Associate, and a visiting scholar at Iowa State University. He holds a Ph.D. in economics from Iowa State University, an M.S. in economics from Wuhan University, and a B.S. in economics and mathematics from Huazhong University of Science and Technology, China.
Dr. Cui’s research centers on Environmental Economics, the Economics of Innovation, and the Economics of Climate Change. His recent research has delved into intriguing topics such as the drivers and obstacles to low-carbon innovation, the economic and environmental impacts of China's climate policy and risk. His scholarly contributions have been published in top-tier academic journals, including Proceedings of the National Academy of Sciences (PNAS), American Economic Review Papers and Proceedings, Journal of Environmental Economics and Management, American Journal of Agricultural Economics, Environmental and Resource Economics, Journal of Regional Science, The World Economy, and Energy Economics. He has served as a referee for leading journals in Environmental Economics, Agricultural Economics, and Economics of Innovation (i.e., JEEM, AJAE, JAERE, Nature Climate Change, and Research Policy), as Associate Editor for the Environment and Development Economics, and a member of the editorial council in JAERE. His research projects have been funded by the National Natural Science Foundation of China (General Program, Junior Program, and Urgent Program) and the Jiangsu Qinglan Project.
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