Can green credit policy promote green innovation in renewable energy enterprises: evidence from China.

Abstract

This paper empirically investigates the effects of the green credit policy (GCP) on the total amount, quality, and quantity of green innovation in renewable energy enterprises(REEs) by employing the difference-in-differences (DID) model. Analyses examining the channel, moderating, and economic effects are conducted using a sample of Chinese listed companies between 2008 and 2021. The results indicate that the GCP significantly promotes the total amount, quality, and quantity of green innovation in REEs. This impact on REEs is mainly through a reduction in green agency costs and an increase in research and development (R&D) spending. In addition, the promotional effects are more predominant in firms subjected to intensified environmental enforcement and benefiting from increased governmental subsidies. Moreover, this positive impact is particularly evident in regions with less environmental pollution and lower economic development. Overall, the adoption of green innovation in REEs, facilitated by the GCP, substantially enhances not only the enterprise value but also the environmental performance of the participating companies. Our findings offer a novel perspective for research related to green innovation within the context of the GCP. This could further contribute to the realization of green development strategies and the construction of a low-carbon society.