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Can green financial pilot policy reduce firms’ carbon emissions? Evidence from Chinese manufacturing firms

Author

Listed:
  • Di Zhou

    (Guangdong University of Foreign Studies)

  • Guo Chen

    (Guangdong University of Foreign Studies
    Sun Yat-Sen University)

  • Dongchun Xie

    (Shantou Polytechnic
    Guangdong University of Foreign Studies)

Abstract

Green development is closely tied to the allocation of economic and financial instruments for resource management. Green finance plays an important role in limiting excessive pollution across various industries. To assess the impact of China’s green finance pilot program (GFPP) on the carbon emissions of manufacturing firms, we treat the implementation of the GFPP as a quasi-natural experiment and find an important evidence that the GFPP reduces firms’ carbon emissions in pilot zones. Moreover, the GFPP promotes firms’ green innovation by easing financial constraints. The policy also enhances public oversight, thereby further reducing firms’ carbon emissions. However, firms’ greenwashing behavior is predicted to weaken the emission-reduction effect of the GFPP. This work provides a basis for carbon emission reductions through green finance in developing countries.

Suggested Citation

  • Di Zhou & Guo Chen & Dongchun Xie, 2025. "Can green financial pilot policy reduce firms’ carbon emissions? Evidence from Chinese manufacturing firms," Economic Change and Restructuring, Springer, vol. 58(1), pages 1-30, February.
    • Handle: RePEc:kap:ecopln:v:58:y:2025:i:1:d:10.1007_s10644-024-09850-3
    DOI: 10.1007/s10644-024-09850-3
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    References listed on IDEAS

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    More about this item

    Keywords

    Green finance; Firms’ carbon emissions; Greenwashing; Difference-in-differences; Quasi-natural experiment;
    All these keywords.

    JEL classification:

    • 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
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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