The impact of green credit policy on enterprise risk-taking: an empirical test based on DID

Shuya Wang

doi:10.54691/bcpbm.v21i.1295

Authors

Shuya Wang

DOI:

https://doi.org/10.54691/bcpbm.v21i.1295

Keywords:

Risk taking, Green credit policy, DID, Natural experiment

Abstract

Green finance is a driving force for energy conservation and green development. Based on the "Green Credit Guidelines" policy issued by China Banking Regulatory Commission (CBRC) in 2012 as a quasi-natural experiment, combined with the financial data of Chinese listed companies from 2008 to 2016, we constructed a DID model to study the impact of green credit as a financial instrument on enterprise risk taking. The results show that green credit can significantly improve enterprise risk taking level. This effect is more effective for state-owned enterprises, enterprises with flexible strategies and enterprises with high information transparency. Furthermore, mechanism analysis indicates that green credit can increase enterprise risk taking level by restraining the inefficient investment behavior and stimulating the endogenous power of enterprises' innovation.

Downloads

Download data is not yet available.

References

Acharya, V.V., Amihud, Y. and Litov, L. (2011) Creditor rights and corporate risk-taking. Journal of Financial Economics, 102, 150-166.

Ambec, S. and Barla, P. (2006) Can environmental regulations be good for business? An assessment of the Porter hypothesis. Energy Studies Review, 14, 42-62.

Cao, C. and Chen, Q.L. (2018) Development of Green finance in China. Modern Management Science, 8, 109-111.

Chen, X.X., Shi, Y.Y. and Song, X.Z. (2019) Green credit constraints, business credit and corporate environmental governance. International Finance Studies, 12, 13-22.

Chen, Y.S., Lai, S.B. and Wen, C.T. (2006) The Influence of Green Innovation Performance on Corporate Advantage in Taiwan. Journal of Business Ethics, 67, 331-339.

Chen,H.D. (2016) Executive Tenure, Equity Incentives and Firm Innovation. China Soft Science Magazine, 8, 112-126.

Cheng, S. (2006). Board size and the variability of corporate performance. Journal of Financial Economics,1,20.

Ding, J. (2019). Green credit policy, credit resource allocation and strategic response of enterprises. Economic Review, 4, 62-75.

Greenstone, M. (2002) The impacts of environmental regulations on industrial activity: Evidence from the 1970 and 1977 Clean Air Act amendments and the Census of Manufactures. Journal of Political Economy, 6, 1175-1219.

Guo, J., Liu, Z.Y. and Peng, T. (2017) The Impact of Bank Lending on Corporate Risk-taking: Promotion or Inhibition?. Accounting Research, 2, 42-48.

Hilary, G. and Hui, K. W. (2009) Does religion matter in corporate decision making in America?. Journal of Financial Economics, 93, 455-473.

Hou, X.H. and Zhang, Y.H. (2006) The impact of R&D investment on firm performance. Science & Technology Management Research, 12, 108-110.

Huang, J.W. and Li, Y.H. (2017) Green Innovation and Performance: The View of Organizational Capability and Social Reciprocity. Journal of Business Ethics, 145, 309-324.

Jin, X.J., Zhong, Y. and Wang, Y.Z. (2014) The macroeconomic consequences of policy uncertainty. Economic Theory and Economic Management, 2, 17-26.

John, O.P., Naumann, L.P. and Soto, C. J. (2008) Paradigm shift to the integrative Big Five trait taxonomy: History, measurement, and conceptual issues. In O. P. John, R. W. Robins, & L. A. Pervin (Eds.), Handbook of personality: Theory and research (pp. 114–158). The Guilford Press.

Koerniadi, H., Krishnamurti, C.and Tourani-Rad, A. (2014). Corporate governance and risk-taking in New Zealand . Australian Journal of Management, 2, 19.

Li, K., Griffin, D., Yue, H. and Zhao, L. (2013) How does culture influence corporate risk-taking?. Journal of Corporate Finance, 23, 1-22.

Li, Q.Y. and Xiao, Z.H. (2020) Heterogeneous environmental regulatory tools and green innovation incentives: Evidence from green patents of listed firms. Economic Research Journal, 55, 192-208.

Li, W.J. and Zheng, M.N. (2016) Substantive or strategic innovation?. Economic Research Journal, 51, 60-73.

Lian, L.L. (2015) Does green credit affect corporate debt financing costs?-- based on the comparative study of green enterprises and "two-high" enterprises. Journal of Financial Economics,30, 83-93.

Lian, Y.L., He, X.G. and Gao, H. (2014) Performance expectation gap and corporate strategy adjustment: An empirical study based on Chinese listed companies. Management World, 11, 119-132.

Lin, Z.Y., Huang, Z.G., Yang, G.Q. and Shi, D.J. (2015) Research on the theory of monetary policy risk-taking channel based on enterprise micro-level. Studies of International Finance, 6, 21-32.

Ma, H. and Hou, G.S. (2018) Investment in environmental protection, financing constraints and technological innovation of firms: a perspective based on long-term and short-term heterogeneity. Securities Market Review, 8, 12-19.

Qi, S.Z., Zhang, Q. and Wang, B.B. (2017) Market-based incentives for innovation of new energy enterprises: Based on venture capital and enterprise patent data. China Industrial Economics, 12, 95-112.

Quan, X.F., Yin, H.Y. (2017) Chinese short selling mechanism and corporate innovation -- A Natural experiment based on incremental expansion of margin and short selling. Management World, 1, 128-144.

Richardson, S. (2006) Over- invest of flee cash flow. Review of Accounting Studies, 11, 159-189.

Shenoy, J. and Williams, R. (2017) Trade Credit and the Joint Effects of Supplier and Customer Financial Characteristics. Journal of Business Economics Financial intermediation, 29, 68-80.

Smith, C.W. and Tulz, R.M. (1985) The Determinants of Firms' Hedging Policies. Journal of Financial and Quantitative Analysis, 20, 391-405.

Song, J.B., Wen, W. and Wang, D.H. (2017) Can returned Executives Promote Corporate Risk taking?. Finance and Trade Economics, 12, 111-126.

Su, D.W. and Lian, L.L. (2018) Does green Credit Affect Investment and Financing Behavior in Industries with Heavy green Credit Restrictions?. Journal of Financial Research, 12, 123-127.

Su, X. and Zhou, S.S. (2019) The impact and adjustment of dual environmental regulation and government subsidies on enterprise innovation output. China population, resources and environment, 29, 31-39.

Sun, Z.L. and Chen, Y.L. (2017) Analysis of financial support, technological progress and energy efficiency based on carbon emission constraint. Commercial Research, 5, 58-66.

Wright, P., Ferris, S.P., Sarin, A. and Awasthi, V. (1996) Impact of corporate insider, blockholder, and institutional equity ownership on firm risk taking. Academy of Management Journal, 39, 441-458.

Yu, M.G., Li, W.B. and Pan, H.B. (2013) Management Overconfidence and Corporate Risk taking. Journal of Financial Research, 1, 149-163.

Zhang, C. and Lv, W. (2009) Information Disclosure, Information Intermediary and Enterprise Overinvestment. Accounting Research, 1, 60-65.

Zhang, G.P., Dong, H.L. and Shen, S. (2016) Green Credit supporting financial Innovation and industrial Structure transformation. Financial Regulation Research, 5, 98-108.

Zhang, Q.C. and Gong, G. (2016) Monetary Policy and Corporate Risk taking: The Mediating Effect of Investor Sentiment. Contemporary Economic Science, 3, 20-30.

Zhang, Y. and Wu, T. (2018) The impact of green credit on the cost of credit financing of listed companies: An estimation based on DID mode. Finance and Economy, 12, 8-12.

Zheng,X.Q., (2015).An Empirical Study on the Characteristics of Board of Directors and Corporate Risk-taking .Financial Economics Research, 3, 107-118.