Does energy efficiency credit policy promote corporate green innovation? Evidence from a quasi-natural experiment in China

Abstract

This study examines the impact of energy efficiency credit policy on corporate green innovation, using China’s policy as a quasi-natural experiment. Previous research has emphasized the relationship between energy efficiency and bank credit; however, few studies have focused on the economic consequences of energy efficiency credit from a policy analysis perspective. Using a difference-in-differences model and data from listed companies in China from 2008 to 2023, this study demonstrates that energy efficiency credit policy promotes corporate green innovation. The findings confirm that credit support, external financing, and green agency costs are the mechanisms through which energy efficiency credit policy fosters green innovation. Additionally, the effectiveness of the policy is more pronounced in regions with stringent environmental regulations, among firms with a higher propensity for risk-taking, and for state-owned enterprises. This study is the first to empirically substantiate the beneficial role of energy efficiency credit policy in advancing green innovation.