Do Green Credit Policies Lead to Greener Companies?

Green credit policy allocates funds through the financial market and continuously guides enterprises to focus on green environmental responsibility. This study examined the effect of green credit policies on company commitments to employ green management strategies. Using Shanghai and Shenzhen A-share listed company-level data from 2009 to 2015, it was found that green credit policies had a significant positive, causal effect on company green commitment. Further, we found that the green policy effect was more pronounced in non-SOEs, pilot low-carbon cities, and are with greater political pressures. This paper sheds new light on the effects of green credit policies on green company behaviours.