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Policy, investment, and growth: How green finance drives corporate sustainable development?

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  • Jiang, Miaoyi
  • Ma, Jun

Abstract

This study utilizes provincial-level data from China's A-share listed companies between 2015 and 2022 to examine the impact of green finance policies on corporate sustainable development performance. The results demonstrate that the policy has a significant positive impact on corporate sustainability levels, a conclusion that holds firm across multiple robustness tests. Furthermore, the mechanism analysis reveals that environmental investment strengthens the positive effect of green finance policies, whereas financing constraints inhibit policy effectiveness, thereby limiting corporate sustainable development potential. Additional analyses suggest that the policy impact is more pronounced in highly polluting, capital-intensive, and highly competitive industries. Moreover, differences in corporate governance structures influence the policy effect. Firms with hard environmental information disclosure benefit more than those with soft disclosure. These findings enrich the empirical evidence on the impact of green finance policies on corporate behavior and provide valuable insights for policy optimization and corporate sustainability strategies.

Suggested Citation

  • Jiang, Miaoyi & Ma, Jun, 2025. "Policy, investment, and growth: How green finance drives corporate sustainable development?," International Review of Economics & Finance, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004897
    DOI: 10.1016/j.iref.2025.104326
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    Keywords

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    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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