TITLE:
The Impact of Green Credit Policy on Corporate Risk Taking
AUTHORS:
Die Feng
KEYWORDS:
Green Credit Policy, Corporate Risk-Taking, Financing Constraints, Agency Costs
JOURNAL NAME:
Theoretical Economics Letters,
Vol.13 No.5,
September
18,
2023
ABSTRACT: In the context of ongoing efforts towards sustainable development, it has
become an urgent and significant issue to explore how to better utilize green
credit to guide enterprises in green innovation and promote the transition to a
green economy. This study considers the original “Green Credit Guidelines”
issued by the China Banking Regulatory Commission in 2012 as a quasi-natural
experiment. It uses a sample of A-share listed companies in the Shanghai and Shenzhen
stock markets from 2005 to 2021. Based on this, a difference-in-differences
model is constructed to explore the relationship between green credit policies
and corporate risk-taking. Parallel trend tests, propensity score matching, and
lagged one-period treatment techniques are then employed to robustly test the
empirical results. Furthermore, the study empirically examines the mechanisms
through which green credit policies affect corporate risk-taking. Regression
analyses are conducted by grouping companies based on ownership nature, scale,
and life cycle to validate the differences in the impact of green credit
policies on corporate risk-taking among different types of enterprises.
Finally, two moderating variables, namely environmental regulations and
heterogeneity in executive education, are introduced to empirically test the
regulatory effects of green credit policies on corporate risk-taking.