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Green Credit Policy, Institution Supply and Enterprise Green Innovation

Author

Listed:
  • Chunji Zheng

    (School of Economics and Management, Xinjiang University, Urumqi, China)

  • Feng Deng

    (School of Economics and Management, Xinjiang University, Urumqi, China)

  • Chengfeng Zhuo

    (Institute of Guangdong, Hong Kong and Macao Development Studies, Sun Yat-sen University, Guangzhou, China)

  • Weiheng Sun

    (Business School, Imperial College London, London, UK)

Abstract

Green credit policy (GCP) relies on financial means to promote environmental governance. Whether it can achieve the goals of economic development and environmental protection, especially in the context of different institutional supplies, remains to be scientifically tested. Based on the implementation of China’s Green Credit Guidelines in 2012, this study uses panel data of Chinese companies from 2009 to 2019 to explore the influence of GCP on green technology innovation and the role of institutional supply in it. The results show that GCP is instrumental in promoting green innovation in heavily polluting enterprises, and the promotion effect is heterogeneous based on green patent types, firms’ ownership, and regional financial development levels. Further analysis finds that the supply of environmental protection systems by local governments can strengthen the green innovation effect of GCP. However, the institutional supply of innovation has not yet released a promotional effect. This paper finds that green credit can be used as an environmental governance tool and provides inspiration for local governments to issue environmental protection policies scientifically.

Suggested Citation

  • Chunji Zheng & Feng Deng & Chengfeng Zhuo & Weiheng Sun, 2022. "Green Credit Policy, Institution Supply and Enterprise Green Innovation," Journal of Economic Analysis, Anser Press, vol. 1(1), pages 20-34, September.
    • Handle: RePEc:bba:j00001:v:1:y:2022:i:1:p:20-34:d:10
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    References listed on IDEAS

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