Environmental Effects of Green Credit Policy: Evidence From China

ABSTRACT This article uses a quasi‐natural test method to study the environmental effects of China's Green Credit Guidelines on high‐polluting enterprises based on firm‐level data. It turns out that the Guidelines have significantly reduced the emission intensity of HPEs, mainly due to the quality improvement of green innovations, changes in the loan structure, assets optimization, and the relaxation of financial constraints. In addition, we also found that the emission reduction effect is more manifest in state‐owned enterprises and in regions with lower levels of marketization and environmental penalties. These conclusions are of great significance for further green credit policies.