Can Green Finance Policies Have Impact on Brown Sector Stocks?

Abstract

In recent years, in response to climate change, China has introduced a series of green finance policies to support the low-carbon transformation of the economy, which may have a negative impact on the brown industry while promoting the development of green industries. This article uses the event study methodology to study the impact of the introduction of three typical green finance policies on the returns of brown industry stocks. The results show that there is consistency in the effects of different types of policies on brown industry stock returns. Overall, Green finance policy has a strong negative impact on the stock returns of brown enterprises in the short term, but has a significant positive impact on those enterprises with good financial performance in the long term.