Does green credit policy affect corporate debt financing? Evidence from China

Green finance is one of the most important ways to help companies achieve green transformation and development. We construct a quasi-natural experiment with the “Green Credit Guidelines” and establish a difference-in-differences model to empirically test the implementation effect of the green credit policy in China. The results show that after the implementation of China’s green credit policy, the debt financing scale of listed companies in heavily polluting industries has decreased significantly, the debt financing cost has increased significantly, and the debt financing maturity has been shortened significantly, indicating that the green credit policy has inhibited the debt financing of heavily polluting enterprises. We further find that this inhibition has also been affected by the nature of controlling shareholders, environmental information disclosure levels, regional environmental regulations and regional financial development levels. China’s green credit policy has played a role in guiding listed companies to go green through the redistribution of debt financing.