Green credit policy and labor investment efficiency: evidence from China

Abstract

Green nance plays a crucial role in driving green development. By leveraging the implementation of the "Green Credit Guidelines" as a quasi-natural experiment in 2012, our study provides compelling evidence that this green credit policy enhances the e cient investment in labor. Our mechanism analysis indicates that the positive impact primarily stems from the upgrading of human capital and the mitigation of agency con icts. Moreover, we nd that the effect of the green credit policy on the e cient investment in labor by green credit-restricted rms is more pronounced when these rms face robust environmental law enforcement and operate with low labor intensity. Additionally, the enhanced investment in labor demonstrates a signi cant positive in uence on future enterprise value. Overall, our ndings underscore the signi cant improvement in corporate labor investment e ciency resulting from the successful implementation of the "Green Credit Guidelines".