The determinants of green credit and its impact on the performance of Chinese banks

Yin, Wei; Zhu, Zheyi; Kirkulak-Uludag, Berna; Zhu, Yaping

doi:10.1016/j.jclepro.2020.124991

Cited by 94 publications

(66 citation statements)

References 44 publications

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“…However, the real effect of green credit is highly uncertain. In practice, the implementation of green credit can be influenced by many factors (Huang et al 2021b ; Yin et al 2021 ). Therefore, in-depth and extensive studies are particularly necessary to accurately evaluate the true effects of green credit.…”

Section: Institutional Background and Literature Reviewmentioning

confidence: 99%

The local-neighborhood effect of green credit on green economy: a spatial econometric investigation

Lei

Wang

Zhao

et al. 2021

Environ Sci Pollut Res

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Green credit is one of the most important financial instruments to promote sustainable development. Taking the provincial panel dataset of China as the research sample, this paper investigates the spatial impacts of green credit on the green economy. The super slack-based measure (Sup-SBM) model with undesirable outputs is employed to calculate the level of green economy within China. On this basis, we establish spatial Durbin models to study the impact of green credit on green economy and its transmission mechanisms. The results show that green credit exhibits a local-neighborhood effect on green economy; that is, the green credit can not only improve the local green economy but also generate spatial spillover effect to promote the development of green economy in surrounding areas. The above conclusion still holds after the robustness test by replacing spatial weight matrices and alternative measurement for the explained variable. Furthermore, enhancing innovation efficiency and optimizing energy structure are important ways for green credit to promote green economy. The findings of this study not only provide a new perspective for understanding the economic consequences of green credit policy but also provide empirical evidence for the important role of green finance in achieving the win-win goals of economic growth and environmental protection. Supplementary Information The online version contains supplementary material available at 10.1007/s11356-021-15419-8.

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Section: Institutional Background and Literature Reviewmentioning

confidence: 99%

The local-neighborhood effect of green credit on green economy: a spatial econometric investigation

Lei

Wang

Zhao

et al. 2021

Environ Sci Pollut Res

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“…Under the bank financing and supplier financing models, the implementation of the GCP makes significant efforts to increase the profits of the entire supply chain [19]. By researching the green credit ratio, Yin et al [35] reached the conclusion that the GCP is less correlated with bank risks, which contributes to the implementation of the GCP. In this paper, government subsidies are added to the POF scheme to observe the impact of the GCP on bank interest rates, after which the payoffs of manufacturers and suppliers are analyzed.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Green Credit Financing and Carbon Emission Limits on the Supply Chain Based on POF

Deng

Yang

2021

Sustainability

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In recent years, environmental protection has been paid more and more attention. Green credit policy (GCP) is one of the significant preferential policies for government to encourage enterprises to vigorously develop green projects. We are interested in the impact of the central bank’s GCP on the profits and optimal strategies of manufacturers and suppliers related to POF (purchase order financing). Specifically, we build a game-theoretical model consisting of a manufacturer, a bank and a green supplier and a non-green supplier. Furthermore, the optimal strategies of the manufacturer and suppliers when the bank or the government sets a carbon emission cap on suppliers are discussed. We come to some important conclusions about a GCP that promotes the development of green projects since it brings higher profits to both the manufacturer and suppliers than the lack of a GCP. Furthermore, the higher the production cost, the better the effect of a GCP. Under the carbon emission restrictions required by the government, the effect of GCP is weakened and the profits of the manufacturer and the suppliers are reduced to zero due to the gradually increasing delivery risks as production costs increase.

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“…To support environmental improvement and curb polluting investments, the People's Bank of China, Ministry of Finance, and National Development and Reform Commission jointly issued the “Guidelines for Establishing the Green Financial System” (hereafter Green Financial System Guidelines) on August 31, 2016, after the China Banking Regulatory Commission issued guidelines targeting green credit in 2012. The Green Financial System Guidelines emphasized that the vigorous development of green credit and green bond is the main step for building a green financial system, thereby increasing enterprises' attention to environmental issues and solving environmental problems through financial means (Liu et al, 2019; Yin et al, 2021). The Green Financial System Guidelines requires creditors to consider environmental and social hazards (e.g., environmental and social issues related to energy use, air pollution, land contamination, occupational and community health, safety and security, ecological protection, climate change, and so on) and the related risks encountered by enterprises in their credit decision‐making.…”

Section: Introductionmentioning

confidence: 99%

Corporate social responsibility, green financial system guidelines, and cost of debt financing: Evidence from pollution‐intensive industries in China

Chen

Xiang

2021

Corp Soc Responsibility Env

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Using a sample of publicly listed firms from 2014 to 2019 in pollution‐intensive industries in China, this study investigates the effect of corporate social responsibility (CSR) on corporate cost of debt financing and how the issuance of the “Green Financial System Guidelines” moderates the above relationship. We find that high CSR performance (including responsibility for shareholders, employees, suppliers and customers, the environment, and the community) is associated with low cost of debt in polluting companies. Moreover, the “Green Financial System Guidelines” strengthens the role of CSR in reducing corporate cost of debt. Further analyses reveal that CSR reduces cost of debt by reducing information asymmetry and business risk, and that green credit development strengthens the role of CSR in reducing corporate cost of debt. Our baseline results are robust to alternative measures and tests that address potential endogeneity concerns by employing the Heckman two‐stage and propensity score matching (PSM) methods.

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The determinants of green credit and its impact on the performance of Chinese banks

Cited by 94 publications

References 44 publications

The local-neighborhood effect of green credit on green economy: a spatial econometric investigation

The local-neighborhood effect of green credit on green economy: a spatial econometric investigation

Impact of Green Credit Financing and Carbon Emission Limits on the Supply Chain Based on POF

Corporate social responsibility, green financial system guidelines, and cost of debt financing: Evidence from pollution‐intensive industries in China

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