Innovation and Green Development (Sep 2024)
Environmental regulation, green credit, and corporate environmental investment
Abstract
Using China's A-share listed companies from 2008 to 2020, this paper empirically investigates the relationship between environmental regulation and corporate environmental investment, and the moderating effect of green credit on this relationship. The paper finds that environmental regulation effectively fosters corporate environmental investment and that green credit positively moderates this relationship. Robustness testing confirms that this conclusion is valid. Further analyses reveal that the efficacy of environmental regulation varies based on the industry characteristics of the company, the location of the company, and the type of property rights it possesses. The effect is more significant for heavily polluting companies, companies in the central and western regions, and non-state-owned companies than for companies of other natures. This paper presents empirical support for assessing the efficiency of environmental regulation, adds a green credit perspective to the mechanism through which macro policy influences corporate behavior, and finally puts forward some suggestions for optimizing China's environmental regulation policies.
