This paper investigates the effect of the green credit policy (GCP) on green innovation in heavily polluting enterprises (HPEs) using the promulgation of the “Green Credit Guidelines” (2012 ...Guidelines) policy in China as a quasi-natural experiment. The findings show that the 2012 Guidelines have had a positive and significant effect on the green patent output of HPEs, especially HPEs under stronger financial constraints. Furthermore, this positive effect occurred predominantly in HPEs with higher expected sunk costs or noncompliance costs, more intense product market competition, and state ownership. These results suggest that the GCP can stimulate green innovation in HPEs by exerting credit constraints, thus achieving green transformation in an emerging economy.
•Green credit policy improves green innovation in heavily polluting enterprises (HPEs)•Improving by exerting financial credit constraints on HPEs•Improvement occurs in HPEs with higher sunk or noncompliance costs•Improvement occurs in HPEs with more intense competition and state ownership•Evidence from a quasi-natural experiment in China
•We examine the impact of green credit policy on corporate total factor productivity.•Green credit policy improves total factor productivity of heavily polluting firms.•Technology innovation and ...resource allocation efficiency are the channels.•Firm characteristics, external monitoring, and regional differences shape the link.
Taking the implementation of the “Green Credit Guidelines” in China in 2012 as an exogenous shock, we adopt the difference-in-differences (DIDs) method to explore the influence of the green credit policy on total factor productivity (TFP). We show evidence of a significant and positive correlation between green credit and corporate total factor productivity, and this result is robust to a series of robustness tests. In addition, the improvement is particularly evident for non-SOEs, small-scale firms, firms with weak external supervision, and firms in developed areas of eastern China. Moreover, the green credit policy mainly affects corporate total factor productivity through promoting technological innovation and enhancing resource allocation efficiency. Overall, green credit promotes the win-win development of the environment and the economy.
Using the quasi-experimental method, this research investigates the impact of green credit policy on the upgrade of energy-intensive enterprises from the perspective of credit allocation efficiency. ...Through the panel data of listed companies in China, this study finds that the green credit policy under the Green Credit Guidelines in 2012 (GCG2012) has a significantly negative effect on the research and development (R&D) intensity and the total factor productivity (TFP) of treated firms. Empirical evidence also shows that the GCG2012 significantly reduces bank credit but increases trade credit. Consequently, the substitution hypothesis is established. Furthermore, GCG2012 has reduced the allocation efficiency of bank credit within energy-intensive industries. As an improved green credit policy to encourage enterprises to invest in energy efficiency, the Energy Efficiency Credit Guidelines in 2015 (EECG2015) increases both the bank credit and the fixed asset investment, whereas no increase in R&D intensity or TFP is found. These findings are enlightening for designing better green credit policies.
•Investigate the impact of green credit policy on the upgrade of energy-intensive enterprises in China.•Use the quasi-experimental method by incorporating an event of green credit policy.•GCG2012 has a significantly negative effect on R&D intensity and TFP of energy-intensive enterprises.•GCG2012 significantly reduces bank credit but increases trade credit.•GCG2012 has reduced the allocation efficiency of bank credit within energy-intensive industries.
Lending is a main instrument of bank institutions’ influence on the development of economy and its subjects. The aim of the paper is to analyze the condition of entrepreneurial subjects lending by ...the bank system, especially agrarian enterprises, and separation of main restraining factors of its development. During 2017-2020 there is observed an essential reduction of volumes of medium-term and long-term credits, given to entrepreneurial subjects. The use of short-term credits for less than 1 year, the most specific weight (80.5 %) of which is possessed by microentrepreneurial subjects with annual income less than 50 thousand euro, prevails. It has been established, that high cost of credit resources, absence of correspondent guarantee and insufficient competitiveness of most entrepreneurial subjects prevent the development of credit relations for all participants (borrowers, creditors and state).
Agricultural economy that produces more than 12 % of GDP and provides more than 40 % of Ukrainian currency receipts, demonstrates positive financial results of activity, is really underfinanced at the expanse of bank credits. A share of credits, directed to the agrarian sector during last years, is essentially less than the contribution of the branch in the gross added value formation in the country. A bank credit policy, acceptable for all entrepreneurial subjects and directed on credit cost decrease and long-term lending increase, is necessary. Studies of the influence of arrangements in the AIC by reduction of credit prices on effective indices (pure profit of agrarian enterprises) has testified a close connection (R=0,9803), comparing with other factors, that is why the practice of using the preferential lending mechanism must be continued, but by stable, not continuously changing approaches and by direct state support of just small and medium entrepreneurial subjects, which are most limited in access to credit resources of bank institutions.
We explore the effect of green credit policy on firm performance of listed firms in China. We find that green credit policy reduces firm performance in heavily polluting industries. This effect is ...more prominent in state-owned enterprises, firms with large size, high institutional ownership, high analyst coverage and during high economic policy uncertainty period. Moreover, we observe that green credit policy decreases heavily polluting firms' performance by increasing firm financing constraints and decreasing investment level. Our results help to restrain heavily polluting enterprises and promote industrial transformation in developing markets.
•We explore the effect of green credit policy on firm performance in China.•Green credit policy reduces firm performance in heavily polluting industries.•This policy effect is more prominent in SOEs and large-cap firms.•This policy effect is more significant in firms with stronger external supervision.•EPU enhances the restraining effect of green credit policy.•Financial constraints and investment level play crucial economic channels.
•Evolution of innovative agricultural credit policies to solve the problem of farmer indebtedness continue to be shaped by a consistent narrative of eliminating informal lending.•Informal lending is ...a barrier to capitalist accumulation.•State policy to eliminate informality perpetuates a class struggle over farmer surplus.
Debt is fundamental to agrarian life across the world. In India, over half of agricultural households are indebted and borrow from myriad credit sources. Formal institutional credit (e.g., bank loans) has historically, and up to the present day, been proposed as a tool for rural development and to eliminate exploitative informal moneylenders. This is true in India, where despite decades of state policies to displace informal lending using formal credit, informal lending persists and increasing debt is an ever-present symptom of the agrarian crisis. Informal lending made up 30% of farmers’ credit sources in 2019; for farmers who owned less than 0.01 ha of land, this was 71.8%. In this paper we provide an historical examination of the numerous state responses to the proliferation of agrarian debt, surveying lending policy as a state development tool in India. We analyze how moneylending has been treated in different historical periods and the increasing participation of the state (from colonial to present times) in agrarian debt and use a Narrative Policy Analysis to synthesize the underlying “narratives” that characterize evolving policy forms. In the process, we reveal not only a consistent narrative assuming the displacement of informal credit with formal credit, one contradicted by the situation on the ground: an absolute increasing trend in borrowing, and a crucial propagation of the number and variety of credit sources. This we observe to be precisely a result of the largely fruitless state effort to formalize credit and to eliminate informal lending. This persistent discourse that posits formality as a solution to informality, we further conclude, is not only a cultural project of the colonial, post-colonial, and modernization state, but one essential for the circulation and accumulation of capital, enhancing its urgency. The failed effort to eliminate informal lending has resulted, furthermore, in a decline in farmer autonomy and the creation of a state-underwritten struggle − between multiple actors in the credit sector − over the redistribution of agrarian surplus.
The Chinese government has proposed a dual credit policy (DCP) as a substitute for electric vehicle (EV) subsidies, which fluctuates the auto market. To investigate the policy substitution influences ...for the production and pricing strategies, we use Stackelberg game paradigms to model a two-stage auto supply chain. The manufacturer regulated by the DCP produces both EV and internal combustion engine vehicles (ICEV). The retailer sells them to heterogeneous consumers. By backward induction, the optimal production and pricing strategies are derived for the subsidy policy only (scenario B) and with a joint subsidy policy and DCP (scenario DS). Our findings show, 1) different with only one case in scenario B, the manufacturer and the retailer have three corresponding optimal production and pricing strategies in scenario DS, according to the manufacturer’s Corporate Average Fuel Consumption credit (CAFC credit); 2) the demand for the ICEV may also decline like EV as the subsidies are phased out in scenario DS when the manufacturer’s CAFC credit is in balance case; 3) the changes of DCP rules may have different effects on the optimal production and pricing strategies in different CAFC cases.
•We studied optimal production and pricing when DCP is substituted for subsidy.•We characterized equilibriums in scenario B and scenario DS.•Phased out subsidies may have opposite impacts on ICEV sales in two scenarios.•Rules of the DCP impact differently on production and pricing in three cases.•Impacts of the NE credit price follow one threshold in case Ⅱ.
To direct financial resources to cleaner production enterprises and achieve the goal of environmental governance, the Chinese government has devoted increasing efforts to facilitating green finance. ...As one of the major policies of green finance, the Green Credit Policy (GCP) was issued in 2012. Evaluating whether the GCP can promote green development has important significance, but few studies have explored its policy effects for the investment and financing behavior of “two high” (high energy consumption and high pollution) enterprises and environmental quality from both micro and macro perspectives. Taking the promulgation of the GCP as a quasi-natural experiment, based on a panel dataset involving 945 A-share listed companies and 30 provinces for the period of 2004–2017, this paper adopts the difference-in-difference model to explore the investment and financing behavior changes of enterprises and environmental impacts of the GCP. The following conclusions are derived. (1) The GCP provides incentives for the short-term financing behavior of “two high” enterprises, but it has a punitive effect in the long term and significantly inhibits the investment behavior of such enterprises. (2) The GCP contributes to the mitigation of sulfur dioxide and wastewater emissions. (3) The GCP has a greater effect on investment and financing behavior among state-owned and large-scale “two high” enterprises than among medium-sized and micro enterprises. (4) There exists regional heterogeneity in the effects of the GCP on the investment and financing of “two high” enterprises and environmental quality. The GCP has positive impacts in the eastern and western regions, and the policy effect is not obvious in the central region.
•The environmental effects of green credit policy are quantitatively investigated.•A dataset involving 945 A-share listed companies and 30 Chinese provinces is utilized.•The green credit policy has incentive and constraint effects on corporate financing and investment of different maturities.•The green credit policy improves environmental quality by affecting corporate financing and investment.•The effects of the green credit policy have regional heterogeneity.
This study investigates the impact of UAE’s Green Credit Policy on the non-performing loan. One of the main pillars in the UAE green agenda 2015–2030 is the green finance that has been growing in ...high acceleration in the Gulf Cooperation Council (GCC) countries and the whole world. Consequently, the main objective of this study is to investigate in the financial risks that associated with green lending and whether an increasing in green lending will decrease the non-performing loans ratio (NPLR) of UAE banks, based on the period 2015–2020 dataset of 23 UAE’s banks. To achieve this objective, we have used a regression technique that includes a two-stage least square regression analysis and random-effect regression analysis to test if the increase in green credit ratio can reduce the NPL ratio in a sample of UAE’s banks. The current study can be considered the first empirical attempt that conducted on the banking sector in UAE, to discover the variables that might have a direct impact on the NPL ratio. The results reveal that the ratio of green loans has a negative impact on the NPL ratio, as much as the return of equity, while the quality of credit, inefficiency, and the bank size have a positive impact on NPL ratio. But as was not as expected, we found that the impact of solvency ratio has a negative significant on the NPL ratio. Finally, the current study introduces a new value to the current literature about the impact of green lending policies and provides a new perspective which supports the financial sustainability in UAE.
New energy vehicles (NEVs) are becoming more and more prevalent for economic and environmental reasons. This paper investigates the issue of the impacts of subsidy policy and dual credit policy on ...NEVs and conventional vehicles (CVs) production decision from an across-chain perspective, in a co-opetitive context, where exists a CV supply chain and a NEV supply chain with two important schemes involved, i.e., government subsidies and dual credit. While previous literature has discussed government subsidies excessively, they seldom study the role of dual credit policy in promoting NEVs. To examine the differences between two schemes, a mixed integer linear programing (MILP) is utilized to develop a stylized production model for a CV supply chain and NEV supply chain system that incorporating subsidies and dual credit trading simultaneously. Using a Lagrange heuristic algorithm to provide an optimal solution regarding NEV and CV production decision as well as dual-credit trading. Simulations are performed on realistic profiles that show, (i) implementing the dual credit policy increases the profit of NEV supply chain, whereas the profit of CV supply chain and of whole supply chain system decline simultaneously, and the schedule of CVs/NEVs without across-chain cooperation is arranged more evenly than that with across-chain cooperation during the transit period to NEVs. Meanwhile, (ii) under dual credit policy, gradually-decreasing subsidies can partially offset the negative impacts of dual credit policy on the NEV supply chain, the subsidies can only serve as a temporary supplement to profits. In addition, (iii) there exists an optimal NEV credit price p∗ to maximize the overall profit of the whole system, and a corresponding threshold value of p∗ for two categories of cars, when above the threshold, the per-CV profit outperforms the per-NEV one and vice versa.
•Developing production models of NEVs/CVs under dual credit policy.•Investigating across-chain credit trading cooperation using MILP approach.•Comparing the impact of both subsidy and dual credit policy on the CV supply chain and NEV supply chain system.
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