Abstract
As a kind of enterprises most affected by green policies-heavily polluting enterprises, whether the government's relevant policies can achieve its policy goals and what impact will be exerted on such enterprises is a critical issue. Based on the data of listed heavily polluting enterprises in China from 2007 to 2020, this paper uses the difference in differences model to test the impact of green credit policies on the liquidity risk of heavily polluting enterprises. The results show that the green credit policies intensify the liquidity risk of heavily polluting enterprises. Moreover, the green credit policies increase the financial and stock liquidity risks of heavily polluting enterprises by reducing the long-term debt ratio and information transparency. Green innovation and equity balance weaken the positive impact of green credit policies on the liquidity risk of heavily polluting enterprises. Heavily polluting enterprises can reduce the impact of green credit policies on their liquidity risk by increasing investment in green innovation and improving ownership structure.
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