Research on the Impact of Green Finance Policies on Corporate Financing Efficiency

An Empirical Analysis based on Green Finance Reform and Innovation Pilot Zones

Abstract

As the world moves deeper into green development, green finance isn’t just a buzzword anymore-it’s a powerful tool that steers social capital into environmentally friendly industries and pushes companies toward greener practices. In this study, I focus on China’s Green Finance Reform and Innovation Pilot Zones, treating them as a kind of natural experiment. I use panel data from A-share listed companies between 2015 and 2023 and apply a multi-period difference-in-differences model to dig into how green finance policies affect corporate financing efficiency and how they work internally.  The data tell a clear story: green finance policies make a real difference for companies inside the pilot zones, boosting their financing efficiency. This effect doesn’t just burst onto the scene and disappear-it grows quickly at first, then settles into a steady state. When I dig into why this happens, I find that green finance policies help companies by easing their financing constraints and helping them strengthen their green governance.  But not all companies benefit in the same way. The positive impact stands out especially among non-state-owned enterprises, high-tech firms, and companies in industries with heavy pollution. There’s another twist: the effects don’t stop at the targeted firms. Green finance policies send positive ripples down the supply chain, further boosting financing efficiency for downstream enterprises. Upstream firms, though, don’t see much change. This research adds fresh evidence to the literature on the real-world, micro-level effects of green finance. It also offers practical insights for policymakers who want to refine the green financial system, help companies raise capital more efficiently, and drive high-quality economic growth.