Abstract
How to utilize financial instrument to deal with environmental issues has been a focal topic. Taking the introduction of green credit program as a “quasi-natural experiment,” the propensity score matching and difference-in-difference approach (PSM-DID) are used to investigate the impact of the green credit policy implemented by Chinese government on firm-level industrial pollutant emissions. The estimation results indicate that the green credit policy significantly reduces corporate sulfur dioxide emissions. Heterogeneity analysis shows this impact is more pronounced for large-scale enterprises and enterprises located in the eastern region. The estimated mediation models reveal that after the implementation of the green credit policy, reduction in sulfur dioxide emissions can be attribute to the increased environmental investment and improved energy consumption intensity. Moreover, the green credit policy is also significantly effective in mitigating the discharge of other common industrial pollutants. Our findings highlight the importance of green credit policies in achieving greener industrial production and more sustainable economic development.
Highlights
As the largest developing country, China’s booming economy development accounts for a large proportion of the world’s energy consumption and pollutant emissions (Yan and Toshihiko, 2009)
We have found that the green credit policy can significantly reduce SO2 emissions in highpolluting industries, implying this policy is highly effective in improving air quality
This paper investigates whether China’s green credit policy contributes to the reduction of firms’ SO2 emissions
Summary
As the largest developing country, China’s booming economy development accounts for a large proportion of the world’s energy consumption and pollutant emissions (Yan and Toshihiko, 2009). Air pollution has caused major concerns (Wang L. et al, 2021). Level of air pollutant emissions depend on many factors, including energy consumption, financial development, transportation infrastructure, etc. Shen et al (2020) noted that China’s air pollution mainly comes from its large consumption of fossil energy, such as coal and fuel oil. Previous studies find that both international export and interprovincial trade exacerbate the health burdens of air pollution in China’s less developed interior provinces (Wang et al, 2017). It can be inferred that air pollution is caused by a combination of many factors
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