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Go green or not? The Impact of green credit on Chinese banks' shadow cost of equity

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  • Zhou, Mingquan

Abstract

This paper investigates the effects of issuing more green credit on Chinese banks’ shadow cost of equity capital. Due to the limited number of listed banks in China, this study estimates the shadow cost of equity capital by employing the directional distance function. Results show that the relationship between the amount of issued green loans and banks' shadow cost of equity depends on bank size and the ownership structure. This research offers new insights into the cost and benefit analysis of participating in green projects.

Suggested Citation

  • Zhou, Mingquan, 2026. "Go green or not? The Impact of green credit on Chinese banks' shadow cost of equity," Finance Research Letters, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:finlet:v:91:y:2026:i:c:s1544612326000231
    DOI: 10.1016/j.frl.2026.109492
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    References listed on IDEAS

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