Allocation Of Credit Resources Research Articles

Intelligent transformation, fintech, and green Growth：A general equilibrium analysis based on credit allocation perspective

This paper conducted an in-depth study to elucidate the impact of corporate intelligence transformation and regional financial technology on green economic growth, particularly the role of credit resource allocation. We developed a multi-sector general equilibrium model, integrating the heterogeneity of intelligent transformation in production sectors and accounting for the influence of Fintech on financial institutions. Within this model framework, panel data from 2011 to 2021 at the provincial, municipal, and micro-enterprise levels in China were used to validate the theoretical model through a mixed regression approach. The findings indicate that as intelligent transformation firms receive more credit resources, their potential for green economic growth increases, contributing to reduced regional carbon emissions. Additionally, the excess productivity of intelligent transformation firms has a significant positive impact on regional carbon reduction efforts. Moreover, the advancement of Fintech reduces financial institutional costs, further optimizing credit allocation and lowering overall market interest rates, thereby promoting green development within the region. However, advancements in Fintech may also redirect more credit resources toward low-risk general enterprises, resulting in a credit crowding-out effect for intelligent transformation firms. These findings indicate that, while promoting intelligent transformation, policy measures should also balance the resource allocation effects of Fintech across different types of enterprises.

Impact of the regional financial reform on corporate financialization: Evidence from China

This study employs the data of Chinese A–share listed companies from 2007 to 2022, considers the implementation of the regional financial reform pilot zone policy as a quasi-natural experiment, and tests the impact of this reform on the financial asset holdings of nonfinancial firms by using a difference-in-difference model. Based on the findings, the regional financial reform restrains the financialization of nonfinancial firms through two paths: 1) promoting profit equalization, which reduces the return gap between real and financial investments; and 2) balancing the allocation of credit resources, which curbs corporate participation in shadow banking. Further analysis showed that the governance effect of the regional financial reform is especially prominent for firms in regions with lower administrative, market development, and financial development levels, especially in the central and western regions. In the economic consequences test, we found that the dampening effect of the regional financial reform on corporate financialization can promote real investments, especially innovation investments. These findings not only enrich the research on the determinants of corporate financialization and the economic consequences of the regional financial reform, but they also provide insights for financial reforms in other emerging economies.

Interregional circulation of credit resources and company innovation.

Although the impact of interest rates, repayment periods, and loan scales on loan consequences has been extensively studied, little attention has been paid to the geographical distance involved in loan transactions. This study collects the addresses of borrowing companies, listed companies, and banks. Nonlocal loans can be distinguished because the regional segmentations in the lending industry reflect the features of provincial boundaries. Using data from Chinese A-share listed companies from 2007 to 2022, this research explores the causes of nonlocal loans and their impact on company innovation. Nonlocal loans are found to address the lack of local credit resources rather than financial constraints, supplementing disposable capital. This interregional circulation of credit resources facilitates innovation, particularly in financially undeveloped areas. This study does not detect research and development manipulation and recognizes the increase in innovation output. The findings have implications for credit resource allocation and balanced regional development.

The impact of bank fintech on corporate debt default

This paper investigates the impact of bank fintech on corporate debt default, and the results show that bank fintech can reduce corporate debt default. Specifically, bank fintech can reduce not only the default of debt issued by banks but also the default of debt issued by other creditors, suggesting a spillover effect of bank fintech in reducing firms' debt default. The heterogeneous results indicate that the mitigating effect of bank fintech on debt default is pronounced for small firms, non-state-owned firms, and firms located in regions with a high degree of marketization. The mechanism tests show that bank fintech can reduce corporate debt default through three channels: increasing new corporate borrowing, improving the efficiency of credit resource allocation, and reducing corporate agency costs.

Can green finance improve the ESG performance? Evidence from green credit policy in China

Green finance, as a crucial policy instrument for achieving environmental and social objectives, has gradually become a focal point of reform in many countries. This study employs the comprehensive ESG (Environmental, Social, and Governance) score of enterprises as a proxy variable for environmental and social responsibility, utilizes difference-in-difference (DID) method and micro-level data from Chinese listed companies spanning the period from 2011 to 2021, reveals that green credit policy significantly enhances the environmental and social performance of relevant enterprises. Further research indicates that green credit policy, through optimizing the allocation of credit resources, fostering environmental awareness among management, and increasing investment in research and development, contribute to the improvement of enterprise ESG performance. Additionally, the degree of regional marketization and the level of financial constraints on enterprises act as moderating factors in the policy's effectiveness, with the enhancing effect of the policy being more pronounced for enterprises with initially top and bottom ESG performance.

The study of firm productivity with green credit policies: evidence from Chinese industrial firms

We use the 2012 Green Credit Guidelines as a quasi-natural experiment and data from A-share listed companies from 2008–2020 to examine the effect of green credit policy on firm productivity and its mechanism of action. The results show that the green credit policy significantly inhibits improvements in firm productivity. The inhibitory effect still holds after a series of robustness tests, such as the difference-in-differences propensity score matching method, placebo test, and change in the timing of policy shocks. The mechanism of action test reveals that credit resource allocation, financing constraints and business credit are important channels through which green credit policy can reduce firm productivity. The heterogeneity test reveals that the inhibitory effect of green credit policy on firms’ productivity improvements in restrictive industries is more significant for private firms, smaller firms, and inland regions. The policy implication of the findings of this paper is mainly to improve the green credit policy guarantee mechanism and policy implementation using the market as the main body, with the goal of realizing the synergistic development of policy implementation and environmental protection and of promoting rational resource allocation.

How Does Green Finance Policy Affect the Capacity Utilization Rate of Polluting Enterprises?

Effectively addressing overcapacity is the main task of China’s deepening supply-side reform and represents an intrinsic requirement for achieving sustainable economic development. Green finance policy, as a kind of environmental regulation policy that influences the behavior of polluting enterprises, can not only effectively facilitate the green transformation of production methods but also have a significant effect on the capacity utilization rate of enterprises. We use the promulgation of the Guidance on Building a Green Financial System in 2016 as a quasinatural experiment and the differences-in-differences (DID) method to study the effect of green finance policies on the capacity utilization rates of polluting enterprises based on data from 2012 to 2020 on A-share listed companies on the Shanghai Stock Exchanges (SSE) and Shenzhen Stock Exchanges (SZSE). We obtained the following results: (1) The implementation of green finance policies markedly improved polluting enterprises’ capacity utilization rate, which was supported by a sequence of robustness tests; (2) The mechanism test revealed that green finance policies serve to rectify information asymmetry and constrain improper government interventions through credit resource allocation mechanisms, thereby inhibiting overinvestments in polluting enterprises and ultimately increasing the capacity utilization rate. Additionally, green finance policies can improve product quality and diversity by incentivizing polluting enterprises’ technological innovation, enabling products to better meet market demand, and ultimately improving the capacity utilization rate; (3) The results of the heterogeneity analysis indicate that, for state-owned and large-scale polluting enterprises, green finance policies play a stronger role in increasing the capacity utilization rate. We have enriched the research related to the policy effects of green finance and the impact of environmental regulation on the capacity utilization rate, thus providing a useful reference for China to utilize green finance policies to address overcapacity, promote the transition to a more environmentally sustainable economic society, and achieve sustainable development.

Financial technology, inclusive finance and bank performance

In recent years, the Chinese banking industry has increasingly used financial technology (FinTech) to increase the credit supply to key areas of inclusive finance, as “impulse” and “fee reduction and profit-sharing” behaviours have exerted pressure on bank performance. This paper analyses the impacts of FinTech on bank performance and the risk adjustment mechanism of FinTech.The results show that, first, when banks issue inclusive loans, the phenomenon of increasing the balance without a corresponding increase in profits, or even resulting in no profits develops because of cost-benefit asymmetry. “Doing business at a loss” negatively impacts bank performance; these losses are primarily associated with small and micro enterprises (SMEs). Second, digital inclusive finance effectively mitigates the negative impacts of traditional inclusive loans, and FinTech boosts bank performance. Third, the positive effects of FinTech are attributable to risk adjustment effects that reduce information asymmetry and transaction costs.This paper demonstrates that digitalisation empowered by FinTech has improved the service efficiency and customer experience of inclusive finance, as well as other business income and bank performance. Banks must be cautious when analysing the risks and benefits afforded by internet platform flow-data. Each head office should formulate a digital financial strategy and unify the deployment of innovative FinTech applications. Bank branches should promote such transformation but must engage in digital inclusive finance differently, based on the level of local FinTech development. This optimises the allocation of credit resources.

Does green finance reform promote corporate green innovation? Evidence from China

In this study, the policy of green finance reform and an innovation pilot site in 2017 was used as a quasi-natural experiment to investigate the influences of green finance reform on corporate green innovation. It was found that corporate green innovation improved significantly after the implementation of green finance reform. According to the mechanism test, green finance reform promoted corporate green innovation by relieving financing constraints, optimizing credit resource allocation, and guiding the fiscal subsidies of the government. It was found in the analysis of heterogeneity that the promoting effect of green finance reform on corporate green innovation concentrated on green enterprises, non-state-owned enterprises, and enterprises in regions with high financial development levels. Furthermore, the PZGFRI could improve market value of enterprises.This study provides clues to disclose the action and mechanism of green finance reform on corporate green innovation and lays a policy foundation for China's green financial development.

Effects of green credit policy on the risk of stock price crash

Green credit policy (GCP) is a specific instrument for the credit resource allocation dimension in the financial sector, and stock price crashes are an important manifestation of financial market risks that cannot be ignored. However, there are gaps in existing research on how green credit policies affect the stock price crash risk (SPCR). Using the Green Credit Guidelines as a quasi-natural experiment, this paper examines the impact of green credit policies on SPCR of heavily polluting firms. It confirms the crash risk is significantly increased for heavily polluting enterprises, mainly due to facing greater financing pressure; and that corporate governance mechanisms reduce its impact, finding that firms with higher analyst attention, higher levels of independent directors, and higher shares held by institutional investors. The effect between GCP and SPCR is not significant for companies with higher analyst attention, higher levels of independent directors, and higher shareholdings of institutional investors. At the same time, it is less significant in regions with high level of financial development. These results of this paper not only enrich the literature in green credit-related fields, but also provide a reference value for understanding the implementation effect of GCP in China to the stock price crash in the capital market.

Digital Finance and Corporate Sustainability Performance: Promoting or Restricting? Evidence from China’s Listed Companies

The development of internet platforms and information technology has accelerated the transformation of conventional finance. Emerging digital finance is expected to optimize the allocation of credit resources and thereby promote a sustainable transition for corporations. However, whether, and to what extent, digital finance empirically affects this process is still not well understood. This paper investigates the role of digital finance in promoting corporate sustainability performance by exploring its impact on green enterprise innovation and its mechanism using a two-way fixed effects model and a mediating effects model. The findings suggest the following: (i) The impact of digital finance on the sustainable performance of enterprises follows a U-shaped (coef. = 0.00, t = 2.43) pattern, where digital finance initially restricts and then promotes the sustainable performance of enterprises. This conclusion remains robust even after considering endogeneity. (ii) The mechanism analysis indicates that digital finance enhances sustainability performance by reducing corporate financial volatility (coef. = −0.00, t = −4.06) and promoting long-term performance growth (coef. = 6.69, t = 4.88). (iii) The positive effects of digital finance on sustainability performance are more significant for non-state-owned firms (coef. = 0.00, t = 5.42), firms located in cities with a lower GDP per capita (coef. = 0.00, t = 2.40), and smaller firms (coef. = −0.00, t = −2.59) in their initial stages. These results imply that China should accelerate digitization in the financial markets and thus further develop its potential for sustainable development.

Does bank competition curb corporate pollution emissions? Evidence from the geographical location of bank branches.

This study interprets enterprise pollution reduction from the perspective of the financial market. Using data on Chinese industrial enterprises, this paper tests the impacts of bank competition on enterprise pollution emissions. The findings show that bank competition has a significant total effect and technique effect on pollutant reduction. Bank competition reduces pollutant emissions by easing financing constraints, increasing the implementation of internal pollution control, and improving the efficiency of bank credit resource allocation. Further research shows that both bank type and bank branch level could moderate the pollution reduction effects and such effects vary a lot under different environmental regulation intensities. We expand the relevant literature on the economic consequences of banking competition and have certain theoretical and practical reference significance for the future reform of the banking industry.

How does e‐commerce demonstration city improve urban innovation? Evidence from China

AbstractThis paper provides a feasible way to realize urban innovation through the e‐commerce pilot. Based on the data of 289 cities in China from 2002 to 2019, we examine the impact of the National E‐commerce Demonstration City pilot on urban innovation with a staggered difference‐in‐differences method. The results show that after becoming a pilot city of National E‐commerce Demonstration Cities (NEDC), the quantity and quality of urban innovation have improved. Further, NEDC policy plays a greater role in promoting innovation in economically agglomerated areas, first‐and third‐tier cities and areas with a higher degree of marketization. Finally, NEDC policy can affect the level of urban innovation by optimizing the allocation of innovation factors, improving the efficiency of credit resource allocation and forming the logistics scale effect.

Spatial spillover effects of financial resource allocation efficiency on green economy: Evidence from China

Financial resource allocation comprises the efficiency of credit resource allocation and the savings-investment transformation rate. Based on the two aspects, the relationships between the efficiency of financial resource allocation and green economic development are empirically tested using China’s panel data from 2000 to 2019 within the spatial Durbin model. The empirical results show that the efficiency of credit resource allocation in China is low, and the flow of credit resources causes a siphon effect. At the same time, the existing savings stock does not form a real credit resource. The empirical results of regional tests show that the allocation efficiency of credit resources in the eastern region is low, and negative externalities exist. The allocation efficiency of credit resources in the central and western regions has a driving effect on the development of the green economy in the region, but there also exist negative externalities. There are positive externalities in the conversion rate of savings and investment. The findings of this study indicate that China is still driving the development of the green economy through the expansion of the total financial scale. The economic benefits of improving the efficiency of financial resource allocation have not been proven.

The Impact Mechanism of Green Credit Policy on the Sustainability Performance of Heavily Polluting Enterprises-Based on the Perspectives of Technological Innovation Level and Credit Resource Allocation.

Green credit policy (GCP), as one of the key financial instruments to achieve 'carbon peaking' and 'carbon neutrality' targets, provides capital support for the green development of enterprises. This paper explores the impact mechanism of GCP on the sustainability performance of heavily polluting enterprises (HPEs) from the perspectives of technological innovation level (TIL) and credit resource allocation (CRA), using panel data for Chinese A-share listed manufacturing companies from 2010 to 2015 to construct a propensity score matching and differences-in-differences (PSM-DID) model. We find that GCP has a causal effect on corporate sustainability performance (CSP). Although GCP significantly improves CSP, there is no long-term effect. Heterogeneity analysis shows that the relationship between GCP and CSP is only significant in non-state-owned enterprises and in eastern and low-market-concentration enterprises. Mechanism tests indicate that GCP stimulates HPEs to invest more in technological innovation and thereby improves CSP through the innovation compensation effect; the credit constraint and information transfer effects caused by GCP reduce the credit resources available to HPEs but have a significant forced effect on CSP. This paper enriches the study of the economic consequences of GCP and provides implications for stakeholders to improve the green financial system and achieve green transformation of HPEs.

Do Financial Support Policies Catalyse the Development of New Consumption Field?—Evidence from China’s New Consumer Enterprises

The development of the new consumption field is crucial to China’s sustained economic growth at this stage, and it is also of significance to catch-up economies in a shift period of economic growth in order to achieve a breakthrough in development. From a micro perspective, relying on propensity score matching and the difference-in-differences method, this paper is the first study to examine the impact of financial support policies on the growth of new consumer enterprises by using the data of A-share-listed enterprises from 2012 to 2021 and to systematically explore this impact mechanism on the basis of the heterogeneity of property rights and regions. The results show the following: First, the implementation of financial support policies is beneficial to catalyse both current growth and the growth potential of new consumer enterprises. Second, financial support policies play a role in the allocation of credit resources for new consumer enterprises and promote their growth by improving credit supply. Third, financial support policies have a more obvious effect on the growth of non-state-owned new consumer enterprises than those that are state-owned, and they play a greater role in promoting the growth of new consumer enterprises in the northern region than that in the southern region. Our conclusions provide a theoretical reference and path reference for achieving targeted assistance for new consumer enterprises and accelerating the sustainable development of the new consumption field.

A Study on Credit Data-Based Poverty Alleviation in Rural Yunnan, China.

The main path of development credit funds in rural poverty alleviation in Y province is crucial. This paper studies the rural poverty alleviation work in extreme poverty areas in Yunnan and puts forward targeted and instructive policy suggestions for specific difficult areas. Research the relationship between credit resource allocation and rural poverty alleviation. The existing research is mainly based on the relationship between financial development and economic growth, income growth, income distribution, and, on the surface, the relationship between the scale of financial development and the efficiency of financial development and other indicators. The purpose is to put forward targeted measures and suggestions on the basis of theoretical research and model analysis to help the Yunnan banking industry support poverty alleviation. The results of the study show that there is a causal relationship between agriculture-related loans.

Is corporate social responsibility constrained by bank credit resource allocation?

AbstractCredit rationing theory suggests that the impact of bank credit allocation on corporate social responsibility (CSR) has the dual effect of adverse selection and moral hazard. In this study, the impact of credit allocation on CSR and its mechanisms are explored in the context of credit rationing theory based on Chinese listed companies from 2010 to 2019. The results show that the impact of bank credit allocation on CSR exhibits an inverted U‐shaped correlation, and there is a critical point (17.9134) at which the increase in credit allocation will promote the level of CSR until the critical point is exceeded, after which the level of CSR will gradually decrease. Credit allocation can influence CSR through information asymmetry (stock price informativeness, analyst tracking) and managerial overconfidence, respectively. Companies with overconfident managers and low transparency in non‐socially responsible weighting systems are more likely to have an inverted U‐shaped relationship between bank credit allocation and CSR. This study provides new empirical evidence to understand the impact of credit allocation on CSR and expands the theory of credit rationing to a certain extent, thereby providing a reference for CSR maximization.

Does farmers' agricultural investment is impacted by green finance policies and financial constraint? From the perspective of farmers' heterogeneity in Northwest China.

Green finance is a situation in which finance and environmental conservation are combined. Green credit management is a crucial green financial mechanism for achieving a win-win situation with economic development and environmental conservation through prudent credit resource allocation. Similarly, the continued involvement of farmers in green finance policies as micro-actors is critical to policy execution in rural regions. In current research, we utilized 2520 micro-surveys to measure the effects of green finance policies on agricultural investment of farmers in a difference-in-differences framework and developed a mediation effect model based on the degree of coupling coordination between financial development and environmental sustainability. It investigates the effects of heterogeneity in farmers' management on the mediating effect of financial restrictions. The study results show that, in comparison to the favorable effects of green finance policies on agricultural investment of farmers, the inclusion of a financial constraint variable reduces that benefit. Furthermore, farmers that engage in non-agricultural management practices are more likely to benefit from green finance policies and are impacted by the intermediate mechanism's financial restrictions. The construction of a rural green financial system should accomplish differentiated positioning and rapid development.

Can environmental regulation improve firm total factor productivity? The mediating effects of credit resource allocation

Can environmental regulation improve firm total factor productivity? The mediating effects of credit resource allocation