IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v87y2024i10d10.1007_s10640-024-00903-9.html
   My bibliography  Save this article

Can the Superposition of Green Policies Improve the Investment Efficiency of High-Polluting Firms Even More?

Author

Listed:
  • Xiaoyu Liu

    (Qingdao University)

  • Yanan Li

    (Qingdao University)

  • Xiao Zhang

    (Qingdao University)

Abstract

We explore the effect of overlapping green policies on investment efficiency of listed firms in China, by regarding the dual policies of green credit and low-carbon city pilot in 2012 as a quasi-natural experiment. The results show that the superposition of green policies can more significantly improve investment efficiency of high-polluting firms than the green policy alone. In addition to limiting credit availability and increasing financial constraints, green policies also influence firms’ ESG ratings, encourage green upgrading and transformation, and increase green investment to promote firm investment efficiency. Further research finds that green policies significantly contribute to investment efficiency improvements for state-owned firms, large-scale firms, firms with higher long-term debt, and capital-intensive firms. Therefore, coordinated green policies provide an opportunity to achieve a win-win situation of “pollution control” and “efficiency improvement”.

Suggested Citation

  • Xiaoyu Liu & Yanan Li & Xiao Zhang, 2024. "Can the Superposition of Green Policies Improve the Investment Efficiency of High-Polluting Firms Even More?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(10), pages 2773-2794, October.
    • Handle: RePEc:kap:enreec:v:87:y:2024:i:10:d:10.1007_s10640-024-00903-9
    DOI: 10.1007/s10640-024-00903-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-024-00903-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10640-024-00903-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Su, Chi-Wei & Li, Wenhao & Umar, Muhammad & Lobonţ, Oana-Ramona, 2022. "Can green credit reduce the emissions of pollutants?," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 205-219.
    2. Brandt, Loren & Li, Hongbin, 2003. "Bank discrimination in transition economies: ideology, information, or incentives?," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 387-413, September.
    3. Ambec, Stefan & Barla, Philippe, 2002. "A theoretical foundation of the Porter hypothesis," Economics Letters, Elsevier, vol. 75(3), pages 355-360, May.
    4. Yu, Yantuan & Zhang, Ning, 2021. "Low-carbon city pilot and carbon emission efficiency: Quasi-experimental evidence from China," Energy Economics, Elsevier, vol. 96(C).
    5. Jintao Ma & Qiuguang Hu & Weiteng Shen & Xinyi Wei, 2021. "Does the Low-Carbon City Pilot Policy Promote Green Technology Innovation? Based on Green Patent Data of Chinese A-Share Listed Companies," IJERPH, MDPI, vol. 18(7), pages 1-18, April.
    6. Byrne, John & Hughes, Kristen & Rickerson, Wilson & Kurdgelashvili, Lado, 2007. "American policy conflict in the greenhouse: Divergent trends in federal, regional, state, and local green energy and climate change policy," Energy Policy, Elsevier, vol. 35(9), pages 4555-4573, September.
    7. Charles J. Hadlock & Joshua R. Pierce, 2010. "New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index," The Review of Financial Studies, Society for Financial Studies, vol. 23(5), pages 1909-1940.
    8. Taghizadeh-Hesary, Farhad & Yoshino, Naoyuki, 2019. "The way to induce private participation in green finance and investment," Finance Research Letters, Elsevier, vol. 31(C), pages 98-103.
    9. Hu, Guoqiang & Wang, Xiaoqi & Wang, Yu, 2021. "Can the green credit policy stimulate green innovation in heavily polluting enterprises? Evidence from a quasi-natural experiment in China," Energy Economics, Elsevier, vol. 98(C).
    10. Song, Qijiao & Qin, Ming & Wang, Ruichen & Qi, Ye, 2020. "How does the nested structure affect policy innovation?: Empirical research on China's low carbon pilot cities," Energy Policy, Elsevier, vol. 144(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shi, Wei & Zhang, Yue-Jun & Liu, Jing-Yue, 2024. "Investigating the role of emissions trading system in reducing enterprise energy intensity: Evidence from China," Energy Economics, Elsevier, vol. 140(C).

    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. Yao, Shouyu & Pan, Yuying & Sensoy, Ahmet & Uddin, Gazi Salah & Cheng, Feiyang, 2021. "Green credit policy and firm performance: What we learn from China," Energy Economics, Elsevier, vol. 101(C).
    2. Yongkang Lin & Qinghua Song & Lingyun He, 2025. "Can the green finance reform and innovation pilot policy promote green technology innovation?—a novelty evidence from both polluting companies and city commercial banks in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(4), pages 8403-8431, April.
    3. Honglu Ma & Wei Ning & Jiyuan Wang & Shouyang Wang, 2025. "Internalising externality: the impact of environmental pollution liability insurance on the green transformation of Chinese heavy-polluting firms," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 50(2), pages 381-404, April.
    4. Qian, Shuitu & Yu, Wenzhe, 2024. "Green finance and environmental, social, and governance performance," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1185-1202.
    5. Zhang, Weike & Luo, Qian & Zhang, Yufeng & Yu, Ao, 2023. "Does green credit policy matter for corporate exploratory innovation? Evidence from Chinese enterprises," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 820-834.
    6. Kopyrina, Olga & Wu, Kai & Ying, Zhanyu, 2023. "Greening through central inspection: The role of legitimacy pressure and risk-taking," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    7. Xijia Huang & Yiting Guo & Yuming Lin & Liping Liu & Kai Yan, 2022. "Green Loans and Green Innovations: Evidence from China’s Equator Principles Banks," Sustainability, MDPI, vol. 14(20), pages 1-20, October.
    8. Wang, Yufeng, 2023. "Can the green credit policy reduce carbon emission intensity of “high-polluting and high-energy-consuming” enterprises? Insight from a quasi-natural experiment in China," Global Finance Journal, Elsevier, vol. 58(C).
    9. Li, Chen & Liu, Zhao & Song, Rong & Zhang, Yue-Jun, 2024. "The impact of green credit guidelines on environmental performance: Firm-level evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 205(C).
    10. Ren, Penghan & Cheng, Zhonghua & Dai, Qingling, 2024. "Can green bond issuance promote enterprise green technological innovation?," The North American Journal of Economics and Finance, Elsevier, vol. 69(PA).
    11. Qingyang Wu & Zhen Sun & Linhan Jiang & Lei Jiang, 2024. "“Bottom-up” abatement on climate from the “top-down” design: lessons learned from China’s low-carbon city pilot policy," Empirical Economics, Springer, vol. 66(3), pages 1223-1257, March.
    12. Xiaowei Ding & Ruxu Jing & Kaikun Wu & Maria V. Petrovskaya & Zhikun Li & Alina Steblyanskaya & Lyu Ye & Xiaotong Wang & Vasiliy M. Makarov, 2022. "The Impact Mechanism of Green Credit Policy on the Sustainability Performance of Heavily Polluting Enterprises—Based on the Perspectives of Technological Innovation Level and Credit Resource Allocatio," IJERPH, MDPI, vol. 19(21), pages 1-26, November.
    13. Lingyue Qiu, 2023. "Does Internet Infrastructure Construction Improve Corporate Green Innovation? Evidence from China," Sustainability, MDPI, vol. 15(1), pages 1-26, January.
    14. Jinling Yan & Junfeng Zhao & Xiaodong Yang & Xufeng Su & Hailing Wang & Qiying Ran & Jianliang Shen, 2021. "Does Low-Carbon City Pilot Policy Alleviate Urban Haze Pollution? Empirical Evidence from a Quasi-Natural Experiment in China," IJERPH, MDPI, vol. 18(21), pages 1-20, October.
    15. Jiang, Pengcheng & Jiang, Hongli & Wu, Jiahui, 2022. "Is inhibition of financialization the sub-effect of the green credit policy? Evidence from China," Finance Research Letters, Elsevier, vol. 47(PB).
    16. Guo, Shu & Zhang, ZhongXiang, 2023. "Green credit policy and total factor productivity: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 128(C).
    17. Wang, Kai-Hua & Zhao, Yan-Xin & Jiang, Cui-Feng & Li, Zheng-Zheng, 2022. "Does green finance inspire sustainable development? Evidence from a global perspective," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 412-426.
    18. Du, Xiaoyun & Meng, Conghui & Guo, Zhenhua & Yan, Hang, 2023. "An improved approach for measuring the efficiency of low carbon city practice in China," Energy, Elsevier, vol. 268(C).
    19. Tan, Yafei & Zhu, Zhaohui, 2022. "The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness," Technology in Society, Elsevier, vol. 68(C).
    20. Wen Chen & Changyi Zhu & Qi Cheung & Siying Wu & Jun Zhang & Jia Cao, 2024. "How does digitization enable green innovation? Evidence from Chinese listed companies," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 3832-3854, July.

    More about this item

    Keywords

    Environmental protection; Green policy; Green credit; Investment efficiency; Low-carbon city pilot;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • 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

    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:kap:enreec:v:87:y:2024:i:10:d:10.1007_s10640-024-00903-9. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.