Green structural monetary policy and firms’ Asymmetric carbon emission reduction: Evidence from China

Abstract

Using data from Chinese listed companies, this paper examines the impact of green structural monetary policy on corporate carbon emissions and its underlying mechanisms from two perspectives: bank credit reallocation and corporate emission reduction strategies. The study finds that the impact of green structural monetary policy on corporate carbon emissions is asymmetric. While the policy significantly reduces carbon emissions for clean enterprises, its suppressive effect on emissions from heavily polluting enterprises is relatively limited. The mechanism test results indicate that in terms of bank credit decisions, the green structural credit policy restricts the financing scale of heavily polluting enterprises, increases their financing costs, and simultaneously provides credit incentives for clean enterprises. In terms of corporate carbon reduction strategies, the asymmetry of policy effects partly stems from differences in how policies influence corporate strategic behaviors. Heavily polluting firms tend to adopt “low-cost strategies,” characterized by end-of-pipe treatment investments and strategic green innovations. In contrast, clean firms are more inclined to pursue “competitive advantage strategies,” emphasizing proactive investment in prevention and substantive green innovations. Further analysis reveals that the asymmetric emissions-reduction effects of the policy are jointly influenced by external and internal factors.