Can green finance lead to green investment? Evidence from heavily polluting industries
Green finance is crucial for promoting eco-friendly projects and mitigating climate-related financial risks. This study examines the impact of China's Green Finance Reform and Innovation Pilot Zone (GFPZ) policy on green investments by heavily polluting companies using the difference-in-differe...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2024
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| Online Access: | http://psasir.upm.edu.my/id/eprint/119321/ http://psasir.upm.edu.my/id/eprint/119321/1/119321.pdf |
| _version_ | 1848867935099027456 |
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| author | Xiaona, Cui Mohd Said, Ridzwana Abdul Rahim, Norhuda Mengjiao, Ni |
| author_facet | Xiaona, Cui Mohd Said, Ridzwana Abdul Rahim, Norhuda Mengjiao, Ni |
| author_sort | Xiaona, Cui |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | Green finance is crucial for promoting eco-friendly projects and mitigating climate-related financial risks. This study examines the impact of China's Green Finance Reform and Innovation Pilot Zone (GFPZ) policy on green investments by heavily polluting companies using the difference-in-differences (DID) method. Findings show GFPZ significantly increased corporate green investment (CGI). Mechanism analysis reveals GFPZ increased financial constraints of heavily polluting companies, compelling them to invest in green projects to improve their financing opportunities. Heterogeneity analysis highlights a greater impact on companies with substantial institutional investor shareholdings, high analyst coverage, extensive digital transformation, and rigorous regional environmental regulation. Further analysis shows that GFPZ notably boosts preventive green investment but not remedial green investment. Additionally, GFPZ amplifies CGI's positive effects on green innovation and carbon emission reductions. This study supports broader GFPZ policy implementation and provides strategies for polluting companies to pursue green development. |
| first_indexed | 2025-11-15T14:44:24Z |
| format | Article |
| id | upm-119321 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:44:24Z |
| publishDate | 2024 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1193212025-09-11T07:59:24Z http://psasir.upm.edu.my/id/eprint/119321/ Can green finance lead to green investment? Evidence from heavily polluting industries Xiaona, Cui Mohd Said, Ridzwana Abdul Rahim, Norhuda Mengjiao, Ni Green finance is crucial for promoting eco-friendly projects and mitigating climate-related financial risks. This study examines the impact of China's Green Finance Reform and Innovation Pilot Zone (GFPZ) policy on green investments by heavily polluting companies using the difference-in-differences (DID) method. Findings show GFPZ significantly increased corporate green investment (CGI). Mechanism analysis reveals GFPZ increased financial constraints of heavily polluting companies, compelling them to invest in green projects to improve their financing opportunities. Heterogeneity analysis highlights a greater impact on companies with substantial institutional investor shareholdings, high analyst coverage, extensive digital transformation, and rigorous regional environmental regulation. Further analysis shows that GFPZ notably boosts preventive green investment but not remedial green investment. Additionally, GFPZ amplifies CGI's positive effects on green innovation and carbon emission reductions. This study supports broader GFPZ policy implementation and provides strategies for polluting companies to pursue green development. Elsevier 2024 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/119321/1/119321.pdf Xiaona, Cui and Mohd Said, Ridzwana and Abdul Rahim, Norhuda and Mengjiao, Ni (2024) Can green finance lead to green investment? Evidence from heavily polluting industries. International Review of Financial Analysis, 95. art. no. 103445. pp. 1-11. ISSN 1057-5219 https://linkinghub.elsevier.com/retrieve/pii/S1057521924003776 10.1016/j.irfa.2024.103445 |
| spellingShingle | Xiaona, Cui Mohd Said, Ridzwana Abdul Rahim, Norhuda Mengjiao, Ni Can green finance lead to green investment? Evidence from heavily polluting industries |
| title | Can green finance lead to green investment? Evidence from heavily polluting industries |
| title_full | Can green finance lead to green investment? Evidence from heavily polluting industries |
| title_fullStr | Can green finance lead to green investment? Evidence from heavily polluting industries |
| title_full_unstemmed | Can green finance lead to green investment? Evidence from heavily polluting industries |
| title_short | Can green finance lead to green investment? Evidence from heavily polluting industries |
| title_sort | can green finance lead to green investment? evidence from heavily polluting industries |
| url | http://psasir.upm.edu.my/id/eprint/119321/ http://psasir.upm.edu.my/id/eprint/119321/ http://psasir.upm.edu.my/id/eprint/119321/ http://psasir.upm.edu.my/id/eprint/119321/1/119321.pdf |