The impact of green credit on the green transformation of the manufacturing industry

Abstract Manufacturing’s green transformation is essential for advancing high-quality development. Green credit, which functions as a market-driven tool, offers support for achieving this transformation. Using manufacturing data from 30 provinces in China from 2005 to 2020, this research establishes a theoretical framework to analyze how green credit and marketization levels influence manufacturing’s green transformation. This research also provides an empirical analysis of how green credit influences this transition. The results are as follows: first, the growth of green credit plays a significant role in driving the green transformation of the manufacturing sector, with this finding remaining valid after a series of robustness and endogeneity tests. Second, the mechanism analysis shows that green credit supports the environmentally friendly transformation of the manufacturing industry through an improvement in R&D intensity. Third, moderation testing reveals that the process of marketization significantly strengthens the positive effect of green credit on the promotion of manufacturing’s green transformation Among them are the following, the relationship between the government and the market and the development of the product market inhibit the role of green credit in support of the green transformation of the manufacturing sector. The development of factor markets, the development of non-state-owned economies, and the development of market intermediary organizations and the legal system environment exert a facilitating function, which significantly enhances the positive effect of green credit in the promotion of the green transformation. The conclusions provide fresh insights and empirical evidence for advancing manufacturing’s green transformation and hold practical significance for refining green credit policies and advancing market-oriented reforms.