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Green credit policy and corporate innovation: A study of heavily polluting listed firms

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  • Gao, Yang
  • Wen, Sizhou
  • Yuan, Jingwen
  • Zhen, Qi

Abstract

Green credit policy, a key component of green finance, plays a significant role in achieving the “double carbon” goal. Using A-share listed industrial firms’ data (2009–2022) and a difference-in-differences approach, we assess the impact of the Green Credit Guidelines. Our research show that the policy inhibits green innovation in heavily polluting firms by raising debt financing costs and reducing government subsidies, though resource allocation optimization offers some incentives. The deterrent effect is stronger for non-state-owned, small, and highly polluting firms, as well as those with poor environmental performance or in heavily polluted regions. This study provides empirical support for improving green fiscal policies.

Suggested Citation

  • Gao, Yang & Wen, Sizhou & Yuan, Jingwen & Zhen, Qi, 2025. "Green credit policy and corporate innovation: A study of heavily polluting listed firms," Finance Research Letters, Elsevier, vol. 85(PE).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pe:s1544612325013716
    DOI: 10.1016/j.frl.2025.108116
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    References listed on IDEAS

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    1. Gao, Wang & Wei, Jiajia & Zhang, Hongwei & Zhang, Haizhen, 2024. "Does climate policy uncertainty exacerbate extreme risk spillovers between green economy and energy metals?," Resources Policy, Elsevier, vol. 91(C).
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    3. Ayyagari, Meghana & Demirgüç-Kunt, Asli & Maksimovic, Vojislav, 2011. "Firm Innovation in Emerging Markets: The Role of Finance, Governance, and Competition," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(6), pages 1545-1580, December.
    4. repec:cup:jfinqa:v:46:y:2011:i:06:p:1545-1580_00 is not listed on IDEAS
    5. Feng, Chen-Yu & Yang, Xiaodong & Afshan, Sahar & Irfan, Muhamamd, 2023. "Can renewable energy technology innovation promote mineral resources’ green utilization efficiency? Novel insights from regional development inequality," Resources Policy, Elsevier, vol. 82(C).
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    Cited by:

    1. Ye Tian, 2026. "Green innovation through government-bank-enterprise collaboration: perspective of evolutionary game with randomly disturbance," Operational Research, Springer, vol. 26(1), pages 1-33, January.

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