Impact of Green Credit Policy on Debt Financing of Heavily Polluted Enterprise

Abstract

The China Banking Regulatory Commission (CBRC) released in 2012 the Guidelines for Green Credit (Guidelines), which symbolizes the rapid development of green credit in China. The CBRC emphasizes the balance between environmental protection and economic development using credit in order to improve the ecology of China and control the pollution of heavily polluted enterprises. The realization of carbon peaking and carbon neutrality goals in China is inseparable from the green development of heavily polluting enterprises. Meanwhile, the low-carbon transformation of heavily polluting enterprises needs the promotion of green credit policies. Therefore, it is of great importance to explore and make full use of the effect of green credit policies on heavily polluting enterprises. Based on the data of all A-share no-ST enterprises in China from 2010 to 2022, this paper classifies the enterprises according to different environmental quality indicators. The control group and the control group are seriously polluted and non-polluted enterprises, respectively. Simultaneously analyzes enterprises with different equity natures and regions to explore the impact of green credit on debt financing of heavily polluting enterprises. The results indicate that the implementation of green credit policies has a significant restraining effect on the debt financing behavior of heavily polluting enterprises, leading to a significant increase in their financing costs. The article also conducted heterogeneity analysis and placebo testing. The results of heterogeneity analysis show that non-state-owned enterprises are more affected than state-owned enterprises. Because state-owned enterprises can obtain more support and information in debt financing, they are relatively easier to obtain funds. In addition, the debt financing costs of heavily polluting enterprises in the eastern region have increased less than those in the central and western regions. Perhaps it is because the operating policies of heavily polluting enterprises in the eastern region are more green and low-carbon. Moreover, the proportion of heavily polluting enterprises is higher in the central and western regions. All of these have motivated the local government to implement green credit policies to cope with the high pressure of environmental governance. Finally, this article proposes policy recommendations from five aspects. These suggestions include improving the government's policy system, increasing environmental awareness among enterprises, promoting green and sustainable development, reducing the gap between state-owned and non-state-owned enterprises, and strengthening coordinated development among different regions.