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Green finance policy and digital transformation of heavily polluting firms: Evidence from China

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  • Li, Shibin
  • Wang, Qian

Abstract

In this paper, we use the “Green Credit Performance Evaluation of Banking Depository Financial Institutions” implemented by the People's Bank of China as a quasi-natural experiment and a difference-in-differences (DID) approach to examine the impact of green finance policy on the digital transformation of heavily polluting firms. The results show that firms' digital transformation is effectively driven by green finance policy. The policy effect is more pronounced among low financing-constrained firms, state-owned firms, and firms with high analyst coverage. Furthermore, green finance policy influences the digital transformation of firms primarily by increasing digital outcomes and guiding management's strategic direction.

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  • Li, Shibin & Wang, Qian, 2023. "Green finance policy and digital transformation of heavily polluting firms: Evidence from China," Finance Research Letters, Elsevier, vol. 55(PA).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002489
    DOI: 10.1016/j.frl.2023.103876
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    Cited by:

    1. Gao, Wei & Liu, Zebin, 2023. "Green credit and corporate ESG performance: Evidence from China," Finance Research Letters, Elsevier, vol. 55(PB).
    2. Wenqing Zhang & Jingrong Dong, 2023. "The Polarization Effect and Mechanism of China’s Green Finance Policy on Green Technology Innovation," Sustainability, MDPI, vol. 15(13), pages 1-26, June.
    3. Yan, Weichen & Cai, Zhipeng & Yang, Aishu, 2023. "Leading the charge: The impact of executives with R&D backgrounds on corporate digital transformation," Finance Research Letters, Elsevier, vol. 56(C).
    4. Jia, Shanghui & Guo, Nannan & Liu, Yingke, 2023. "Electricity shortage and corporate digital transformation: Evidence from China's listed firms," Finance Research Letters, Elsevier, vol. 57(C).
    5. Pingkuo Liu & Jiahao Wu, 2023. "Game Analysis on Energy Enterprises’ Digital Transformation—Strategic Simulation for Guiding Role, Leading Role and Following Role," Sustainability, MDPI, vol. 15(13), pages 1-33, June.

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    More about this item

    Keywords

    Central bank; Green finance policy; Digital transformation; Heavily polluting firms;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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