The Impact of Green Credit Policy on Enterprise Innovation Performance

In 1992, the United Nations held the Rio Earth Summit introduced the concept of sustainable development. Linking environmental protection with economic growth, which catalyzed the development of green finance. With growing environmental problems, many countries, including China, have implemented policies to promote financial support for sustainable development. Since 2012, China has prioritized ecological civilization and green development, encouraging both polluting and green enterprises. Green credit policy, which support environmental protection investments, have a significant impact on enterprise innovation. This paper explores the impact of green credit policies on the innovation performance, using data from the CSMAR and CNRDS databases. The study shows that green credit policies significantly improves innovation in both restricted and non-restricted enterprises, with those facing restrictions exhibiting better innovation quality. This study highlights that China's green credit policy not only promotes environmental investment but also facilitates economic restructuring and industrial transformation. Additionally, this paper uses a more novel index, "R&D expense profit margin," to assess enterprise innovation performance and guide the effective use of green credit policies.