Green Credit Policy and Corporate Green Innovation in China

Abstract

Purpose - The study aims to explore the impact of green-credit policies on the green innovation of Chinese enterprises and analyzes the moderating effects of green credit constraints on industry enterprises, as well as commercial credit and financing constraints.
 Design/Methodology/Approach - In this paper, the theory of sustainable development, the Porter Hypothesis, and the theory of financing constraints are combined to analyze the impact of green credit policies on corporate green innovation using A-share listed companies from 2007 to 2021 as research samples. The Differences-in-Differences (DID) model is used. The DID model can eliminate the effects of time and individual fixed effects by comparing the differences between the treatment group and the control group, thereby providing a more accurate estimation of the policy’s impact.
 Findings - The research results show that green credit policies have played an important role in promoting corporate green innovation. Enterprises actively engaged in green innovation have achieved good development after implementing green-credit policies through structural adjustments and improving market competitiveness.
 Research Implications - The impact mechanism of green credit on the green innovation of industry enterprises can provide reference for the formulation and optimization of green financial policies, promote sustainable development of enterprises, realize the transformation and upgrading of the green economy, and have positive significance in promoting green governance and sustainable development.