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Does the transition finance policy facilitate lending for heavy polluters? Insights from China

Author

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  • Chen, Ping
  • Yao, Xiaoyang
  • Li, Jianfeng
  • Wang, Ya

Abstract

This study employs a difference-in-differences approach to examine how transition finance policies affect lending to heavy polluters. The results demonstrate that while green finance policies constrain lending, transition finance policies facilitate credit access of heavy polluters, particularly for state-owned enterprises, large firms, and those in less competitive markets. Neither policy significantly reduces lending costs. Further analysis reveals that innovation mediates this relationship between the transition finance policy and lending, with ESG performance moderating this mediation effect. These findings provide new evidence on the differential impacts of finance policies and their underlying mechanisms.

Suggested Citation

  • Chen, Ping & Yao, Xiaoyang & Li, Jianfeng & Wang, Ya, 2025. "Does the transition finance policy facilitate lending for heavy polluters? Insights from China," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325008840
    DOI: 10.1016/j.frl.2025.107625
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    References listed on IDEAS

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