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The impact of green finance and technology on the commercial banks’ profit and risk

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  • Zhou, Zhiyi
  • Tong, Jing
  • Lu, Haoyang
  • Luo, Shouyi

Abstract

This paper investigates the impact of green credit on the performance and risk of Chinese commercial banks, and also explores the impact of green technology on this mechanism. The results show that for all banks, green loan balances have a significantly negative impact on net profit. While for large, small and medium sized banks, it also reduces and increases bank insolvency risk respectively. Therefore, our findings suggest that the standard mechanism for measuring the benefits of green credit should be improved and the regulatory mechanism for green credit should be strengthened.

Suggested Citation

  • Zhou, Zhiyi & Tong, Jing & Lu, Haoyang & Luo, Shouyi, 2024. "The impact of green finance and technology on the commercial banks’ profit and risk," Finance Research Letters, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324007451
    DOI: 10.1016/j.frl.2024.105715
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    References listed on IDEAS

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    1. Kong, Dongmin & Liu, Chenhao, 2024. "Centralization and regulatory enforcement: Evidence from personnel authority reform in China," Journal of Public Economics, Elsevier, vol. 229(C).
    2. Mingzhe Yu & Qiang Zhou & Mui Yee Cheok & Jakub Kubiczek & Nadeem Iqbal, 2022. "Does green finance improve energy efficiency? New evidence from developing and developed economies," Economic Change and Restructuring, Springer, vol. 55(1), pages 485-509, February.
    3. Yuan, Mengyi & Zhang, Lin & Lian, Yonghui, 2022. "Economic policy uncertainty and stock price crash risk of commercial banks: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 587-605.
    4. Zhuo Wang & Muhammad Sadiq Shahid & Nguyen Binh An & Mohsin Shahzad & Zulkiflee Abdul-Samad, 2022. "Does green finance facilitate firms in achieving corporate social responsibility goals?," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 5400-5419, December.
    5. An, Xin & Ding, Yue & Wang, Yao, 2023. "Green credit and bank risk: Does corporate social responsibility matter?," Finance Research Letters, Elsevier, vol. 58(PA).
    6. Dongmin Kong & Ni Qin, 2021. "Does Environmental Regulation Shape Entrepreneurship?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(1), pages 169-196, September.
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    Cited by:

    1. Liu, Xiaorui & Guo, Wen, 2025. "Dynamic impact of green finance on renewable energy development: Based on scale, structure, and efficiency perspectives," Renewable Energy, Elsevier, vol. 238(C).
    2. Murè, P. & Giorgio, S. & Antonelli, V. & Bittucci, L., 2025. "Environmental credit products: Where do we stand? A response from an academic content analysis," The Quarterly Review of Economics and Finance, Elsevier, vol. 100(C).

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