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Environmental Effects of Credit Allocation Structure and Environmental Expenditures: Evidence from China

Author

Listed:
  • Qiming Yang

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

  • Jun He

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

  • Ting Liu

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

  • Zhitao Zhu

    (Institute of Advanced Technology, University of Science and Technology of China, Hefei 230026, China)

Abstract

This article studies how the allocation structure of bank credit capital between state-owned and private enterprises and government environmental expenditures affect environmental pollution in China. The present literature argues that credit allocation and government environmental expenditures may play an important role in environmental quality improvement. However, these studies rarely consider the credit allocation structure between State-owned enterprises (SOEs) and private enterprises; in addition, they overlook the interaction effects of credit allocation and government environmental expenditures. Based on these, we put forward three hypotheses. Moreover, the study applies relevant spatial data for 2011–2017 from 31 provinces in China to a spatial econometric model, and the results indicate that (1) environmental pollution among provincial regions shows a significant positive spatial autocorrelation. (2) Environmental expenditures and environmental pollution display an inverse U-shaped relationship, which supports the numerical simulation results. (3) The interaction effect of credit allocation structure and environmental expenditures on environmental pollution is significantly positive, which means that the allocation of more credit capital to private enterprises will restrain the effect of government environmental expenditures. With the increasing significance of environmental protection in China, it is necessary to strengthen the supervision of private enterprises’ environmental pollution behavior, expand government expenditures on ecological protection, and promote regional collaborative environmental governance to improve environmental quality.

Suggested Citation

  • Qiming Yang & Jun He & Ting Liu & Zhitao Zhu, 2021. "Environmental Effects of Credit Allocation Structure and Environmental Expenditures: Evidence from China," Sustainability, MDPI, vol. 13(11), pages 1-16, May.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:11:p:5865-:d:560586
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    References listed on IDEAS

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    2. Fan, Wei & Yan, Ling & Chen, Boyang & Ding, Wangwang & Wang, Ping, 2022. "Environmental governance effects of local environmental protection expenditure in China," Resources Policy, Elsevier, vol. 77(C).
    3. Yilmaz Bayar & Özlem Yorulmaz & Oğuzhan Yelkesen & Valentin Toader, 2024. "The interaction between ICT penetration and sustainable development: empirical evidence from African countries," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
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    5. Liu, Zongang & Wu, Yongmin, 2025. "Digital fiscal system and ecological environment," International Review of Financial Analysis, Elsevier, vol. 105(C).
    6. Richard Arhinful & Hayford Asare Obeng & Leviticus Mensah & Comfort Constance Mensah, 2025. "Signaling Sustainability: The Impact of Sustainable Finance on Dividend Policy Among Firms Listed on the London Stock Exchange," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 8001-8019, November.

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