IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i15p6674-d1707042.html

The Green Finance Reform Pilot Zone Policy and Corporate Sustainable Development Performance: A Quasi-Natural Experiment from China

Author

Listed:
  • Shunping Teng

    (School of Management, Universiti Sains Malaysia, Minden Penang 11800, Malaysia
    Business School, Hunan Institute of Technology, Hengyang 421002, China)

  • Haslindar Ibrahim

    (School of Management, Universiti Sains Malaysia, Minden Penang 11800, Malaysia)

Abstract

This study investigates the effect of the Green Finance Reform Pilot Zone Policy (GFRPZP) on corporate sustainable development performance (SDP) using a multi-period difference-in-differences (DIDs) regression model. This model incorporates control variables, reflecting firm-level characteristics and regional economic conditions. The results show that GFRPZP significantly enhances corporate SDP, with stronger effects observed among non-state-owned enterprises (Non-SOEs), companies situated in eastern regions, those in non-heavily polluting industries, and high-tech companies. Mediation analysis indicates that the policy enhances sustainable development through four main channels: improving the quality and quantity of green innovation, easing financing constraints, and increasing analyst attention. Moderation analysis further demonstrates that digital transformation and internal control strengthen the policy’s effect.

Suggested Citation

  • Shunping Teng & Haslindar Ibrahim, 2025. "The Green Finance Reform Pilot Zone Policy and Corporate Sustainable Development Performance: A Quasi-Natural Experiment from China," Sustainability, MDPI, vol. 17(15), pages 1-19, July.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:15:p:6674-:d:1707042
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/15/6674/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/15/6674/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hui Li & Dongsheng Yu & Zhixuan Ke, 2023. "Commercial System Reform, Enterprise Green Innovation and Enterprise ESG Performance," Sustainability, MDPI, vol. 15(19), pages 1-19, October.
    2. Shanqing Liu & Jiacheng Qian & Huwei Wen & Ying Wang, 2025. "The Impact of Green Finance Pilot Cities on Enterprises’ Green Innovation Performance: An Empirical Study in China," Sustainability, MDPI, vol. 17(3), pages 1-21, January.
    3. Orhan Akisik & Graham Gal, 2017. "The impact of corporate social responsibility and internal controls on stakeholders’ view of the firm and financial performance," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 8(3), pages 246-280, July.
    4. Li Guo & Fangxia Chen & Linhao Chen, 2024. "Does Green Finance Development Enhance the Sustainability Performance of China’s Energy Companies?," Sustainability, MDPI, vol. 16(18), pages 1-19, September.
    5. Orhan Akisik & Graham Gal, 2017. "The impact of corporate social responsibility and internal controls on stakeholders’ view of the firm and financial performance," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 8(3), pages 246-280, July.
    6. Marin, Giovanni, 2014. "Do eco-innovations harm productivity growth through crowding out? Results of an extended CDM model for Italy," Research Policy, Elsevier, vol. 43(2), pages 301-317.
    7. Liu, Sheng & Wang, Yukai, 2023. "Green innovation effect of pilot zones for green finance reform: Evidence of quasi natural experiment," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    8. Yanbo Zhang & Xiang Li, 2022. "The Impact of the Green Finance Reform and Innovation Pilot Zone on the Green Innovation—Evidence from China," IJERPH, MDPI, vol. 19(12), pages 1-20, June.
    9. 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.
    10. Muhammad Haroon Shoukat & Kareem M. Selem & Dongmei Cao, 2024. "How do corporate social responsibility initiatives enhance sustainability performance? Evidence from tobacco firms," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(12), pages 31371-31399, December.
    11. Sonia Chien-i Chen & Xinlei Xu & Chung-Ming Own, 2024. "The Impact of Green Finance and Technological Innovation on Corporate Environmental Performance: Driving Sustainable Energy Transitions," Energies, MDPI, vol. 17(23), pages 1-18, November.
    12. Yu-Shan Wang & Yi-Jie Chen, 2017. "Corporate social responsibility and financial performance: event study cases," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(2), pages 193-219, July.
    13. Chowdhury, Soumyadeb & Dey, Prasanta Kumar & Rodríguez-Espíndola, Oscar & Parkes, Geoff & Tuyet, Nguyen Thi Anh & Long, Dang Duc & Ha, Tran Phuong, 2022. "Impact of Organisational Factors on the Circular Economy Practices and Sustainable Performance of Small and Medium-sized Enterprises in Vietnam," Journal of Business Research, Elsevier, vol. 147(C), pages 362-378.
    14. Augustine Donkor & Terri Trireksani & Hadrian Geri Djajadikerta, 2023. "Board Diversity and Corporate Sustainability Performance: Do CEO Power and Firm Environmental Sensitivity Matter?," Sustainability, MDPI, vol. 15(23), pages 1-24, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Janßen, Niklas, 2025. "Integrating sustainability in risk management and internal control systems: An empirical assessment of ESG reporting of German DAX40 firms," Junior Management Science (JUMS), Junior Management Science e. V., vol. 10(4), pages 858-875.
    2. Lee, Chien-Chiang & Wang, Fuhao & Lou, Runchi & Wang, Keying, 2023. "How does green finance drive the decarbonization of the economy? Empirical evidence from China," Renewable Energy, Elsevier, vol. 204(C), pages 671-684.
    3. Jiazhan Gao & Guihong Hua & Baofeng Huo, 2025. "Turning “green” into “gold”: A study on the impact of green finance pilot zone policy on energy carbon emission efficiency," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(1), pages 129-143, February.
    4. Shikha Bhatia & Divya Marwaha, 2022. "The Influence of Board Factors and Gender Diversity on the ESG Disclosure Score: A Study on Indian Companies," Global Business Review, International Management Institute, vol. 23(6), pages 1544-1557, December.
    5. Xu, Aiting & Zhu, Yuhan & Wang, Wenpu, 2023. "Micro green technology innovation effects of green finance pilot policy—From the perspectives of action points and green value," Journal of Business Research, Elsevier, vol. 159(C).
    6. Subramaniam Sri Ramalu, 2026. "Green Behavior in the Workplace: The Role of Authentic Leadership and Psychological Capital in Shaping Environmental Citizenship in the Sri Lankan Public Sector," Information Management and Business Review, AMH International, vol. 18(1), pages 40-52.
    7. Han, Linzhi & Li, Jiawen, 2025. "Does green finance reform promote corporate carbon emission reduction? Evidence from China's green finance reform and innovation pilot zones," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 2091-2111.
    8. Shanqing Liu & Jiacheng Qian & Huwei Wen & Ying Wang, 2025. "The Impact of Green Finance Pilot Cities on Enterprises’ Green Innovation Performance: An Empirical Study in China," Sustainability, MDPI, vol. 17(3), pages 1-21, January.
    9. Hema Diwan & Binilkumar Amarayil Sreeraman, 2024. "From financial reporting to ESG reporting: a bibliometric analysis of the evolution in corporate sustainability disclosures," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(6), pages 13769-13805, June.
    10. Jiehui Zhang & Sen Yang & Yifeng Wang, 2024. "How does the level of enterprise digitalization affect value creation and realization? Testing of the dual path of "based on breakthrough" and "tending to compliance"," PLOS ONE, Public Library of Science, vol. 19(6), pages 1-25, June.
    11. Han, Jie & Zhang, Wei & Liu, Xuemeng & Muhammad, Anas & Li, Zhenjie & Işık, Cem, 2025. "Climate policy uncertainty and green total factor energy efficiency: Does the green finance matter?," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    12. Jawad Abbas & Hina Najam, 2025. "Role of environmental decentralization, green human capital, and digital finance in firm green technological innovation for a sustainable society," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(8), pages 19763-19777, August.
    13. Tu Thanh Hoai & Nguyen Phong Nguyen, 2022. "Internal Control Systems and Performance of Emerging Market Firms: The Moderating Roles of Leadership Consistency and Quality," SAGE Open, , vol. 12(3), pages 21582440221, September.
    14. Guo, Shu & Zhang, ZhongXiang, 2023. "Green credit policy and total factor productivity: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 128(C).
    15. Alejandro García-Pozo & Juan Antonio Campos-Soria & J. Aníbal Núñez-Carrasco, 2021. "Technological innovation and productivity across Spanish regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(1), pages 167-187, August.
    16. Gebhardt, Beate & Hellstern, Laura, "undated". "Die Kraft von Awards. Umfrage unter Unternehmen und Vergabeinstitutionen in Deutschland 2023," Working Papers 338798, Universitaet Hohenheim, Institute of Agricultural Policy and Agricultural Markets.
    17. Roberto Cerchione & Renato Passaro & Viviana Sicardi, 2025. "Do no Significant Harm (DNSH) Principle in Corporate Sustainability Strategies: Towards a Methodological Framework," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(6), pages 7528-7552, November.
    18. Giovanni Marin & Francesca Lotti, 2017. "Productivity effects of eco-innovations using data on eco-patents," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(1), pages 125-148.
    19. Song Wang & Yifan Wang & Chaoquan Wang & Liang Dai & Yueqi Li, 2026. "The Coordinated Development of the “Center-Periphery†Structure in Regional Economy: The Dual Driving Force of Technological Innovation and Digital Economy," International Regional Science Review, , vol. 49(1), pages 91-142, January.
    20. Zhang, Wan & Zhang, Yuyao & Mou, Suitao, 2025. "Green finance development on corporate sustainability: Evidence from china," Finance Research Letters, Elsevier, vol. 82(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:15:p:6674-:d:1707042. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.