Green Credit and Green Transformation of High-Polluting Enterprises: “Extrusion Effect†or “Porter Effect†?

The green credit policy has become a key measure for addressing pollution issues and promoting economic green transformation. This study uses the difference-in-differences model to examine the impact and mechanisms of the Green Credit Guidelines on the green transformation of high-polluting enterprises, using A-share listed companies in China from 2007 to 2021 as the sample. Our comprehensive performance evaluation of enterprise green transformation is based on pollution emissions, financialization, and total factor productivity. The results show that the green credit policy significantly enhances enterprises’ emission reduction effectiveness while reducing financialization and suppressing total factor productivity. Mechanism analysis indicates that the green credit policy primarily stimulates green innovation and mitigates financialization by imposing increased financing constraints; however, it also crowds out overall R&D investment, thus harming economic performance. The results support the “extrusion effect†rather than the “Porter effect.†Heterogeneity tests demonstrate that the green transformation of non-state-owned, low endogenous financing, eastern region, and strong socially responsible enterprises is more pronouncedly influenced by the policy. Further, the level of green finance development and the intensity of environmental regulations exhibit differential moderating effects on the policy’s outcomes. This study examines the effect of the green credit policy from multiple dimensions and highlights the contradiction between emission reduction and sustainable development, providing insight into the green transformation of high-polluting enterprises.