IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v12y2025i1d10.1057_s41599-025-05621-1.html
   My bibliography  Save this article

From Green to Gold: the cash management impact of China’s new diversified green finance policy

Author

Listed:
  • Ping Lin

    (Minjiang University)

  • Dixin Cai

    (Minjiang University)

  • Qingfeng Geng

    (Minjiang University)

  • Junbing Xu

    (Minjiang University)

Abstract

Amidst escalating concerns over climate change and worsening air pollution, green finance has garnered considerable interest from academics and policymakers. In contrast to previous green finance policies that relied on a single financial instrument, Chinese government implemented the Green Financial Reform and Innovation Pilot Zones (GFRIPZ) policy in 2017, a new diversified green finance policy. Our paper examines whether green finance from GFRIPZ policy affects firm cash holdings, known as the firm “lifeblood”. The findings document that the firms located in cities implementing GFRIPZ policy hold fewer cash holdings than other firms do after policy year. Specifically, green finance reduces firm cash holdings by 8.54% of the sample mean. Additionally, this effect is attributed to relaxation of credit constraints, or enhancement of sustainable transformation, and this effect would be enhanced by a high informal credit market, high internal governance, high operational stability. Overall, this paper reveals the firm cash holding effects of a new diversified green finance policy from developing countries, which provides empirical evidence for sustainable development.

Suggested Citation

  • Ping Lin & Dixin Cai & Qingfeng Geng & Junbing Xu, 2025. "From Green to Gold: the cash management impact of China’s new diversified green finance policy," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-14, December.
    • Handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05621-1
    DOI: 10.1057/s41599-025-05621-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-025-05621-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-025-05621-1?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

    for a different version of it.

    More about this item

    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:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05621-1. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: https://www.nature.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.