The Impact of Green Finance Policy on The Capital Structure of the UK Manufacturing Industry

We investigate whether and how the policy of establishing green finance pilot zones affects corporate environmental performance in China, by employing the DID model and taking 2324 Chinese A-share listed companies as the empirical sample. The main findings show that the green finance policy can significantly improve corporate environmental performance in the green finance pilot zones. The policy effect varies according to enterprise ownership, sector, and degree of environmental supervision. In particular, compared with private enterprises and enterprises subject to key pollution monitoring, the environmental performance of state-owned firms and non-key pollution-monitored firms is more positively affected by the green finance policy. Through a mechanism analysis, we find that corporate innovation and financial constraints can play partially mediating roles in the linkage of green finance policy and corporate environmental performance. Among them, the mediating effects of green innovation and financial constraints are more prominent in private enterprises and key pollution-monitored enterprises. However, although the green finance policy can positively influence bank loans obtained by enterprises, there is no evidence to suggest that bank credit plays a significant mediating role between the green finance policy and corporate environmental performance. Our findings are helpful for understanding the effect of green finance policy on environmental sustainability and could provide some references for policymakers. In particular, we suggest that private and key pollution-monitored enterprises should actively respond to the green finance policy, broaden financing channels, and enhance capability of green innovation, thereby improving their environmental performance.

As global climate change issues have become increasingly severe, green finance has gained widespread attention from governments and financial institutions as a crucial tool for promoting sustainable development. This paper explores the impact of green finance reform pilot zones on corporate debt default risks based on a difference-in-differences model. We found that green finance policies significantly increase corporate debt default risks by exacerbating financing constraints and reducing stock liquidity. A heterogeneity analysis revealed that polluting enterprises, non-state-owned enterprises, and companies in the Eastern region are more susceptible to the impacts of this policy. This paper suggests that the government should formulate differentiated green finance policies tailored to different types of enterprises and regional characteristics.

CiteSpace was used to visualize the knowledge ecology of the green finance research literature in CNKI and WOS, and NVivo software was used to root the code analysis of the current green finance policies in China. From the analysis of the research hotspots, both in China and internationally, great importance is attached to the research on green finance, and the research on green financialization has broad prospects. The core group of authors on green finance research in China has taken shape, whereas the core group of authors of green finance research in the rest of the world has not yet taken shape. There is a lack of close cooperation and a relatively low level of communication among important domestic green finance research institutions, and a certain scale of cooperation network has been formed among influential international institutions. The major countries for influential international green finance research are Singapore, France, Switzerland, Canada and Saudi Arabia, and the international influence of China’s green finance needs to be improved. Both domestic and foreign countries attach great importance to the balance between economic growth and the low-carbon green transition. China attaches more importance to macroeconomic development and strategic transition, but internationally, the trend is toward microcorporate green performance, policy optimization and market innovation. The research focus of green finance has achieved in three stages of evolution, namely, green industry in the early stage, green services in the middle stage and green strategy in the near future. International green finance research focuses on climate change, market players, government performance, social responsibility sharing, etc. In particular, reducing the cost of green development is the focus of international green finance. The domestic focus is on climate risk, carbon neutrality, carbon peak, low-carbon transition, carbon reduction, and green transition themes. Internationally, the focus is on financial performance, decisions, green finance, credit, drivers, quality, socially responsible investment and other topics. Considering the practical implementation of green finance in China, the governance logic of China’s green finance policy consists of five main categories: policy belief, policy objective, policy tool, policy feedback and policy cycle. In the future, the development and improvement of China’s green finance policy should achieve breakthroughs in the following aspects: first, guiding the main body of green finance policy to firmly establish policy beliefs; second, improving the clarity of green finance policy objectives; third, enhancing the overall effectiveness of the governance of green financial policy instruments; fourth, strengthening the green finance incentive policy feedback system construction; and fifth, improving the quality of green finance policy cycles.

Green finance represents a transformative policy innovation designed to incentivize corporate environmental stewardship and accelerate sustainable economic development. However, the effectiveness of green finance in enhancing firm-level environmental performance remains underexplored, particularly considering the role of regulatory oversight. This study investigates how green finance policies impact Enterprise Green Total Factor Productivity (EGTFP), incorporating the moderating effect of regulatory distance. Using a Difference-in-Differences (DID) approach and the 2017 Green Finance Reform and Innovation Pilot Zones in China as a quasi-natural experiment, we analyze A-share listed manufacturing firms from 2010 to 2022. Our findings reveal that green finance initiatives significantly boost EGTFP, especially among firms with environmentally-experienced executives, state-owned ownership, heavy pollution profiles, and those operating in more economically developed, market-oriented, and digitally inclusive regions. Mechanism analyses indicate that green finance policies foster green technological innovation, mitigate financing constraints, and promote environmental investments, thereby internalizing environmental costs. Furthermore, greater regulatory distance weakens the positive effects of green finance on firms' green productivity. These results highlight the necessity of bridging financial instruments and environmental regulatory frameworks to maximize the effectiveness of green finance. Strengthening coordination between financial institutions and regulatory authorities is crucial to advancing the green transformation of the manufacturing sector.

Does green finance policy help to improve carbon reduction welfare performance? Evidence from China

In recent years, green finance has emerged as a commonly used strategy for dealing with environmental problems. However, it still remains to be seen whether green finance deals effectively with current global environmental problems. More recently, proposals regarding greening monetary policy have emerged. The goal of this paper is to provide a conceptual framework that helps to distinguish between different forms of green finance and monetary policy. We systematically analyse forms, tools and measures of green finance and monetary policy against different theoretical backgrounds. In so doing, we fill a research gap by providing an appropriate classification that is intended to facilitate future academic research. We provide different categories and distinguish, on an abstract level, between neoliberal, reformist and progressive forms of green finance. Furthermore, we provide sub-categories on a more concrete level of abstraction. With this, we focus on both financial market regulation and monetary policy strategies. Against the background of our categorisation, the different focuses on green finance and green monetary policy and the (often implicitly) underlying theoretical assumptions become transparent. The classification has significant implications for the evaluation of different perspectives and is, therefore, important for academic debate. The classification also potentially represents a basis for policy related discussions. We conclude that neoliberal forms of green finance and monetary policy that rely on the assumption of the effectiveness of markets for contributing to sustainability tend to neglect or abstract from potentially adverse distributional effects. Reformist forms of green finance and monetary policy are more skeptical of the effectiveness of market processes and, therefore, consider a greater role for government policies. In addition, reformist approaches are more concerned about the potentially adverse distributional effects of environmental policies. Finally, progressive green finance and monetary policy adopts a more global perspective on environmental issues and links the discussion intrinsically with questions of global inequality and socio-ecological transformation. Moreover, progressive approaches are skeptical of global capitalism at a systemic level and therefore demand global rules and financial and monetary regimes that allow for solutions of environmental problems based on global solidarity and a democratic economic governance.

Supply chain decarbonization has emerged as a pivotal developmental trend in the era of achieving carbon neutrality. The advancement of green finance is critical for enhancing a low-carbon supply chain finance system, enabling businesses to align better with green transformation commitments. Although previous research has examined the impact of green finance policies on enterprises, the specific mechanisms through which green finance innovations influence green supply chains have not been adequately explored. We use data from China’s listed companies (2009–2022) and employ the Difference-in-Differences model to assess the effects of green finance innovation and pilot reform policies on corporate supply chain carbon emissions and their underlying mechanisms. We find that green finance policies significantly reduce supply chain carbon emissions because these policies foster low-carbon supply chains by enhancing enterprises’ green innovation capabilities, alleviating financing constraints, and elevating corporate executives’ green awareness. We additionally identify that the carbon emission reduction effect of green finance innovation on suppliers is enhanced in enterprises with a robust high-tech foundation, limited supply chain finance, or those located in regions with stringent environmental regulations. We offer theoretical and empirical support for governments to develop and refine differentiated green finance policies aimed at achieving sustainable economic development goals.

Demand for green finance: Resolving financing constraints on green innovation in China

Addressing the productivity challenge of climate technology (ClimTECH) firms and avoiding the “green trap” is crucial for decoupling economic growth from carbon emissions and achieving sustainable development. This study uses the establishment of green finance reform and innovation pilot zones as a quasi‐natural experiment and employs a difference‐in‐differences model to explore the impact of green finance policies on the total factor productivity (TFP) of ClimTECH firms and its spillover effects. The results show that (1) Green finance policies significantly increase TFP, especially in state‐owned firms, firms that actively disclose environmental information, firms led by long‐tenure CEOs, and those in regions with strong intellectual property protection. (2) The channel analysis shows that green finance policies enhance firms' TFP by easing financing constraints, encouraging green technology improvements, and improving capital allocation efficiency. (3) The spillover effect analysis shows that the TFP increase driven by green finance policies not only enhances firm value but also stimulates local green innovation and reduces regional carbon emissions. This research offers theoretical insights and policy implications for strengthening green finance frameworks and enhancing the environmental responsibility of ClimTECH firms.

As global pressure intensifies for the industries to reduce carbon emissions, businesses are increasingly adopting green practices to achieve their environmental goals. This study examines the interrelationship of green finance, corporate social responsibility (CSR) activities, and green logistics towards achieving net zero emissions and their effects on financial performance in the light of growing international concerns for climate change. This study intends to answer how these three strategic pillars of green finance, CSR, and green logistics synergistically work towards environmental sustainability while increasing the organizations integrated bottom line. As part of CSR, there is a growing concern for the ethical treatment and social reputation which must be bestowed by businesses which improve stakeholder relations. Ethically responsible companies reduce their carbon emissions and spend less on energy due to increased investments in green practices. The findings of this study elucidate that green finance has a substantial role in implementation of CSR activities linked with community, employees, and customers. The findings also illustrated that green logistics have positive links with net zero emission and CSR activities. This research underscores that the integration of these practices makes it possible not only to achieve the global goal of net zero emissions but also increasing operational efficiency. The current study provides novel perspective by examining aforementioned variables relationships and providing sound implications for practitioners and governmental bodies.

As a crucial instrument, green finance policy facilitates the transition toward a green and low-carbon regional economic structure, which is essential for realizing the target of “double carbon” and the harmonious coexistence of nature and humans. Therefore, taking the green financial reform and innovation pilot zone as a quasi-natural experiment, we select 270 cities from 2010 to 2021 as research samples and empirically assess the effects of the green finance policy on reducing regional carbon emissions through the double debiased machine learning (DDML) model. This study demonstrates that (1) green finance policy plays a significant role in promoting regional carbon emission reduction, and this conclusion remains valid after a variety of robustness tests; (2) the mechanism of action indicates that green finance policy contributes to regional carbon emission reduction by supporting green technological innovation and promoting the optimization of the industrial structure; (3) the analysis of heterogeneity reveals that green finance policy has a more pronounced effect on carbon emission reduction in the eastern region and in non-resource-based cities than in the central and western regions and in resource-dependent cities; and (4) the pilot policy of “Broadband China”, the pilot policy of information consumption, and the comprehensive experimental zone of big data has a synergistic effect on carbon reduction and emission reduction with green finance policy. The findings of this study not only contribute to deepening the understanding of the effects of the green finance pilot policy on regional carbon emission reduction but also provide policy support for local governments to explore green technology comprehensively, grasp new opportunities for green development, and expand the space for sustainable economic development with the assistance of the green finance pilot policy.

In the context of promoting the orderly expansion of capital investment and rational allocation of resources to achieve green and circular economic development. Green finance, as a new engine to promote the sustainability of enterprises, holds significant importance in exploring the positive effect of green finance policies on optimizing the investment decisions of enterprises and guiding them to efficiently utilize their resources to maximize value creation. Using A-share listed companies in Shanghai and Shenzhen from 2012 to 2022 as the research sample, we apply the Difference-in-Differences (DID) method to test the impact of the green finance reform and innovation pilot zones (2017) on the investment efficiency of enterprises in the pilot regions. We also adopt a two-step method to test the mechanisms of financial resource misallocation and agency costs. The study reveals that the green finance policy significantly enhances the investment efficiency of enterprises in the pilot areas. Financial resource misallocation and agency costs are important influence mechanisms. Drawing on resource allocation theory and agency theory, the study concludes that the green finance policy alleviates financial resource misallocation by directing financial resources toward high-efficiency enterprises. Moreover, the policy effectively reduces agency conflicts caused by power separation and information asymmetry, ensuring that enterprises can maximize the benefits of their investments. Heterogeneity analysis shows that non-state-owned enterprises and low-tech innovative enterprises in the pilot areas have disadvantages in terms of capital stock and loan credit, so the policy can improve their investment efficiency effectively. Based on these findings, we recommend that to leverage the positive effects of the green finance policy, it is essential to enhance the guiding role of the government, strengthen market mechanisms, and bolster corporate initiatives. This study complements the research on the economic effects of location-orientated comprehensive green finance policies on enterprises, considering the dual aspects of resource allocation efficiency and corporate governance, and makes up for the shortcomings of the existing literature. The study's conclusions offer valuable insights for enhancing green finance to support enterprises in achieving efficient production.

While the literature has examined the key role of green finance policy on firms’ green innovation and environmental performance, little attention has been paid to firms’ environmental, social, and governance (ESG) performance, which is increasingly important to stakeholders. Exploiting heterogeneity in firms’ exposure to the green finance pilot zones policy in China in 2017 as a quasi-natural experiment, this paper employs the difference-in-differences model to explore the effect of green finance policy on firms’ ESG performance. Based on the data of listed manufacturing firms in China during 2013–2020, our results indicate that the green finance policy could promote firms’ ESG performance. Moreover, the overall positive effect is driven mainly by the environmental pillar. Utilizing subsample estimation and the triple differences method, we further find that the higher ESG performance is driven by firms with less financial constraints, firms in economically more developed pilot zones, and state-owned enterprises (SOEs). Mechanism analysis indicates that the pilot policy promotes firms’ ESG performance even if it worsens firms’ financial constraints. Our study contributes to the research on both the impacts of green finance policy and the relationship between financial constraints and ESG performance, as well as to the literature on ESG structure.

This paper, grounded in the perspectives of green process innovation and green product innovation, examines how green finance policies influence the performance of green technology innovation in both high-polluting and low-polluting enterprises by altering their debt financing constraints. Additionally, it scrutinizes the influence of local government competition and intellectual property protection on this mechanism. The results show that the green finance pilot zone policy can improve the green innovation performance of polluting enterprises; green finance policies can promote green innovation by increasing the debt financing constraints of polluting enterprises. Local government competition can reduce the impact of green finance policies on the debt financing constraints and green innovation performance of polluting enterprises. Intellectual property protection can positively adjust the relationship between debt financing constraints and green innovation, as well as the relationship between policies and green innovation in green finance pilot zones. We hope that the aforementioned research will serve as a valuable resource for scholars and aid in making strategic decisions about green finance for enterprises.

ABSTRACTIn recent years, global economic uncertainty has intensified, making it crucial for export‐oriented enterprises to bolster their export resilience to withstand external risks. This study uses the 2012 release of the “Green Credit Guidelines” by the former China Banking Regulatory Commission as a quasi‐natural experiment, using data from China's listed manufacturing firms between 2009 and 2016. We conduct a difference‐in‐differences model to investigate experimentally how green financing policies affect export resilience. According to the findings, green finance policies considerably improve the export resilience of non‐heavily polluting enterprises (NHPEs) relative to their heavily polluting counterparts (HPEs). We conduct a number of robustness tests to guarantee the validity of our conclusions. Mechanism analyses reveal that green finance policies improve export resilience through the effects of green innovation, alleviating financing constraints, and enhancing ESG performance. Heterogeneity tests indicate stronger impacts in state‐owned enterprises, large‐scale firms, and firms with longer operating histories. Additionally, higher levels of regional digital inclusive finance and greater industry market concentration further reinforce export resilience. Further analysis demonstrates that green finance policies not only improve NHPEs' risk resistance but also enhance their export recovery capabilities. For businesses looking to use green finance to increase export resilience, these findings provide insightful information.