ORIGINAL RESEARCH article
Front. Environ. Econ.
Sec. Ecological Economics
Volume 4 - 2025 | doi: 10.3389/frevc.2025.1611379
This article is part of the Research TopicSustainable Urban Transitions: Integrating Renewable Energy, Circular Economy, and Policy InnovationView all 4 articles
Green Credit Policy's Impact on Polluting Firms' Market Performance: The Role of Financing Constraints
Provisionally accepted
- 1Qingdao University of Science and Technology, Qingdao, Shandong Province, China
- 2Ocean University of China, Qingdao, China
- 3Qingdao University of Technology, Qingdao, Shandong, China
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As the contradiction between China's economic growth and energy consumption becomes increasingly prominent, how to guide resource allocation towards green sectors through financial policies has emerged as a critical issue for achieving sustainable development. As a key instrument integrating environmental regulation with financial control, green credit policies require in-depth examination to determine their effectiveness in directing credit resources, improving corporate environmental behavior, and promoting economic transformation. This study employs data from A-share listed companies between 2008 and 2023, utilizing the 2012 issuance of the Green Credit Guidelines as a natural experiment. It applies a Difference-in-Differences (DID) approach to examine the impact of green credit policies on the market performance of polluting enterprises and their underlying mechanisms. Findings reveal that green credit policies significantly suppress the market performance of heavily polluting enterprises, with this effect primarily channeled through heightened financing constraints, particularly pronounced among privately owned firms. Heterogeneity analysis indicates marked variations in policy impact across firms differing in industry concentration, possession of green innovations, and regional development levels. Polluting enterprises in highly concentrated industries, those possessing green innovations, and those located in eastern regions experience relatively lesser impacts. These findings not only validate the effectiveness of green credit policies in optimizing credit resource allocation but also provide novel empirical evidence for understanding the synergistic mechanisms between financial policies and environmental governance. The study further refines the differentiated implementation mechanisms for green credit policies, avoiding the excessive impact of a 'one-size-fits-all' approach on certain enterprises. It offers theoretical foundations for the precise design of green finance policies and holds significant implications for advancing China's green economic transition.
Keywords: Green credit policy, Market performance, financial cost, Financial constraints, China
Received: 19 May 2025; Accepted: 05 Sep 2025.
Copyright: © 2025 Wang, Bian, Zhu, Lu and Wang. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Baocheng Bian, bbc@stu.ouc.edu.cn
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