Abstract
ABSTRACT Can structural monetary policy (SMP) bolster green finance and carbon reduction? This paper uses the implementation of the Carbon Emission Reduction Facility (CERF) in China as a novel quasi-experimental framework and identifies firms with green credit projects as the treatment group through textual analysis. Employing a PSM-DID method, we find that the CERF significantly enhances loan accessibility for treated firms. This effect is more pronounced among financially constrained firms, private-owned enterprises, and those located in central and western China. Furthermore, the policy mainly facilitates short-term loans. Our findings underscore the benefits of SMP in promoting sustainable finance and providing additional credit to firms that are disadvantaged under aggregate monetary policy.
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