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The Impact of Green Credit Policy on Technological Innovation of Firms in Pollution-Intensive Industries: Evidence from China

Author

Listed:
  • Shixian Ling

    (Business School, Shandong University, Weihai 264209, China)

  • Guosheng Han

    (Business School, Shandong University, Weihai 264209, China)

  • Dong An

    (College of Business Administration, Hebei Agricultural University, Baoding 071001, China)

  • William Cannon Hunter

    (Department of Convention Management, College of Hotel & Tourism Management, Kyung Hee University, Seoul 02447, Korea)

  • Hui Li

    (School of Economics and Management, Harbin Institute of Technology, Weihai 264209, China)

Abstract

How to promote technological innovation with green finance policy has been a focal topic in the global green finance field in recent years. Using the difference-in-difference approach model, this paper investigated the impact of the Green Credit Guidance (GCG) policy implemented by the Chinese government in 2012 on the technological innovation of firms in pollution-intensive industries. The empirical results indicated that GCG had a negative impact, not only on research and development (R&D) input, but also on innovation output, and the impacts on firms with different property rights and different scales were consistent. Further research showed that GCG reduced the long-term debt of firms in pollution-intensive industries, and then significantly decreased the R&D input and innovation output; that is, long-term debt is a mediator in GCG and technology innovation. The results revealed that GCG fails to promote the technological innovation of firms in pollution-intensive industries. This paper suggests that China’s green credit policy should pay more attention to the technological innovation, transformation, and upgrading of firms in pollution-intensive industries.

Suggested Citation

  • Shixian Ling & Guosheng Han & Dong An & William Cannon Hunter & Hui Li, 2020. "The Impact of Green Credit Policy on Technological Innovation of Firms in Pollution-Intensive Industries: Evidence from China," Sustainability, MDPI, vol. 12(11), pages 1-16, June.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:11:p:4493-:d:366002
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    Cited by:

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    5. Hu, Yi & Jin, Shuchang & Ni, Juan & Peng, Kai & Zhang, Lei, 2023. "Strategic or substantive green innovation: How do non-green firms respond to green credit policy?," Economic Modelling, Elsevier, vol. 126(C).
    6. Taqdees Fatima & Bing Xiang Li & Dan Zhang, 2025. "Fostering innovation sustainability with the impact of incremental environmental information disclosure under green credit constraints," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(8), pages 18997-19024, August.
    7. M. P. Afanas’ev & N. N. Shash, 2022. "ESG Transformation in the Corporate Sector: Systematizing the Global Approach," Studies on Russian Economic Development, Springer, vol. 33(6), pages 707-715, December.
    8. Lingling Xu & Tingting Tian, 2024. "Blockchain-enabled enterprise bleaching green regulation banking evolution game analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 27457-27483, November.
    9. Xuezhen Xiong, 2022. "The Impact of Environmental Protection Requirements on the Development of Green Animal Husbandry: An Evolutionary Game between Local Governments and Breeding Companies," Sustainability, MDPI, vol. 14(21), pages 1-20, November.
    10. Sun, Jingyu & Chen, Dan, 2025. "Green credit, tourism technology innovation, and sustainable development of tourism," International Review of Economics & Finance, Elsevier, vol. 99(C).
    11. Yanwei Lyu & Yangyang Bai & Jinning Zhang, 2024. "Green finance policy and enterprise green development: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 414-432, January.
    12. Yuming Zhang & Chao Xing & David Tripe, 2020. "Redistribution of China’s Green Credit Policy among Environment-Friendly Manufacturing Firms of Various Sizes: Do Banks Value Small and Medium-Sized Enterprises?," IJERPH, MDPI, vol. 18(1), pages 1-28, December.
    13. Bhatnagar, S. & Sharma, D., 2022. "Evolution of green finance and its enablers: A bibliometric analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    14. Cui, Xin & Wang, Panpan & Sensoy, Ahmet & Nguyen, Duc Khuong & Pan, Yuying, 2022. "Green Credit Policy and Corporate Productivity: Evidence from a Quasi-natural Experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    15. Zhengge Song & Jingjing Tang & Haijian Zeng & Fangying Pang, 2024. "How Urban-Level Credit Expansion Affects the Quality of Green Innovation: Evidence from China," Sustainability, MDPI, vol. 16(5), pages 1-22, February.
    16. Zhifeng Zhang & Hongyan Duan & Shuangshuang Shan & Qingzhi Liu & Wenhui Geng, 2022. "The Impact of Green Credit on the Green Innovation Level of Heavy-Polluting Enterprises—Evidence from China," IJERPH, MDPI, vol. 19(2), pages 1-19, January.
    17. Zhang, Can & Wei, Wei & Du, Chaofei & Abedin, Mohammad Zoynul & Lucey, Brian, 2025. "Asymmetric impacts of sustainable credit on industrial low-carbon development: Evidence from China," Research in International Business and Finance, Elsevier, vol. 80(C).
    18. Yanmin Shao, 2024. "Does excessive debt affect the green technology innovation? Evidence from China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 19579-19596, August.
    19. Peng, Changhong & Zhang, Shuqin & Rong, Xueyun & Chen, Dongjing, 2024. "Is China's green credit policy effective? -Based on the perspective of enterprise environmental performance and economic performance," International Review of Economics & Finance, Elsevier, vol. 94(C).
    20. Wang, Jinwei & Li, Xiaofan & Zhang, Ting & He, Chonghe & Zhu, Liwen, 2025. "The impact of green finance reform and innovation policies on green investors in China," Finance Research Letters, Elsevier, vol. 83(C).
    21. Song, Malin & Xie, Qianjiao & Shen, Zhiyang, 2021. "Impact of green credit on high-efficiency utilization of energy in China considering environmental constraints," Energy Policy, Elsevier, vol. 153(C).
    22. Le Thanh Ha, 2025. "Deploying green macroprudential policies to promote environmental health: new findings from panel VAR for international database," Environment Systems and Decisions, Springer, vol. 45(3), pages 1-21, September.
    23. Haoyang Tan & Qiang Zhang, 2021. "Application of Blockchain Hierarchical Model in the Realm of Rural Green Credit Investigation," Sustainability, MDPI, vol. 13(3), pages 1-9, January.
    24. Hongfeng Zhang & Shuying Wei, 2024. "Green finance improves enterprises’ environmental, social and governance performance: A two-dimensional perspective based on external financing capability and internal technological innovation," PLOS ONE, Public Library of Science, vol. 19(4), pages 1-22, April.
    25. Ho Dinh Bao & Le Thanh Ha, 2025. "Sustaining Marine Minerals Toward Sustainable Blue Economy by Promoting the Inflows of Green FDI: New Insights From a Global Database," Natural Resources Forum, Blackwell Publishing, vol. 49(3), pages 3262-3279, August.

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