Impact of green finance on R&D of "two high and one surplus" enterprises against the greenwashing background: exploring the role of green credit

The green credit policy (GCP), which serves as the focal point of the green finance system in China, helps devote credit resources to projects that promote preservation of the environment while limiting the inflow of bank credit funds to enterprises that are high polluting, high energy consuming, or have surplus capacity (two high and one surplus). GCP limits the risk of "Greenwashing" because of the application of financial technology and tight policy implementation criteria, and the mandatory effect of the policy is extremely noticeable. As micro-entities for green development, "two high and one surplus" enterprises are also important subjects for research and development (R&D) activities and the reshaping of China's economy. Whether "two high and one surplus" enterprises can achieve transformation and upgrading through R&D activities is critical to China's high-quality development. This study employs the difference-in-difference (DID) model to investigate the effect and mechanism of GCP on R&D of "two high and one surplus" enterprises, using the launch of "Green Credit Guidelines" (GCG) in 2012 as an external event and A-share listed enterprises from 2009 to 2019 as the study's object. The results are as follows: (1) GCG's implementation severely inhibits R&D in "two high and one surplus" enterprises. After the robustness test, such as replacing proxy variables and removing the interference of related samples, the findings still hold, and the dynamic test results indicate that the inhibitory effect has the feature of accumulation; (2) the mediating effect test results indicate that GCG can lower the debt financing scale, thus inhibiting "two high and one surplus" enterprises' R & D; however, the cost of debt financing does not play a mediating role between the implementation of GCG and the R&D of "two high and one surplus" enterprises. (3) The heterogeneity test findings suggest that state-owned enterprises (SOEs) have a greater inhibitory impact. (4) The heterogeneity test findings reveal that the inhibitory impact is greater in non-banking-enterprise association enterprises. Based on a comprehensive focus on the restricted loan granting objects required by GCP, this study enriches the literature in areas such as research about the effects of green finance policies by providing evidence on practical explanations.