Abstract
Using the formal implementation of the 2012 Green Credit Guidelines (GCG) as an exogenous shock to construct a quasi-natural experiment, we study the impact of green credit policies on the inefficient investment of heavily polluting enterprises in China's listed enterprises from 2008 to 2020. We find that green credit policies can significantly alleviate the inefficient investment of heavily polluting enterprises. By reducing agency costs and long-term debts, green credit policies alleviate inefficient investment in heavily polluting enterprises. Moreover, the alleviating effect of green credit policies on the inefficient investment has significant heterogeneity in terms of property rights, internal characteristics.
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