Micro Governance Mechanism Of Green Credit Policy

The rapid economic development has brought about the improvement of overall national strength and national wealth,but the traditional economic development mostly relies on energy consumption,which has caused a series of problems such as energy shortage and ecological environment deterioration,making people’s lives face great challenges and their sense of well-being has been seriously affected by the deterioration of the ecosystem.Although China’s ecological environment is improving,the situation is still not optimistic,and the serious challenge of resources and environment has aroused widespread concern.1983,China included "environmental protection" in the basic national policy,and paid more and more attention to environmental issues.In September 2020,General Secretary Xi Jinping announced at the 75 th United Nations Conference that China would strive to achieve peak CO2 emissions by 2030 and carbon neutrality by 2060."The "3060 target" and "carbon peaking and carbon neutrality" have become hot topics at the National People’s Congress in 2021 and are included in the 14 th FiveYear Plan.To achieve a balance between economic development and environmental issues,the key is to change the direction of economic development and achieve sustainable development.Tsinghua University’s Institute of Climate Change and Sustainable Development has calculated that a temperature increase of 1.5-2 degrees Celsius is expected in the next thirty years,so China may need 100 trillion yuan to 138 trillion yuan of new investment in energy facility systems in the next thirty years.The Goldman Sachs study says that by the end of 2060,China’s clean energy infrastructure investment will exceed $16 trillion(about RMB 10.4 billion).According to preliminary estimates,China’s green industry will require at least RMB 2 trillion in annual investment during the 13 th Five-Year Plan period,but the investment will only account for 15-20% due to central and local financial resources.If we rely only on national financial support,a huge investment gap will be formed,which makes it difficult to realize the effective support of green development.Environmental governance requires a large amount of investment support,which highlights the need for financial market instruments.Finance has the important function of serving the real entity,and can guide the flow of social resources through the function of resource allocation and leverage,thus directly affecting the national environmental protection and ecological civilization construction process and implementation effectiveness.The People’s Bank of China has also announced that it will establish a green financial system,aiming to bring into play the role of market mechanisms to enable more social capital to enter the green development field.With the top-down advocacy and promotion of the central government,China has become the first economy in the world to establish a national green financial policy system,and has made remarkable achievements in breaking the resource and environmental constraints,strengthening the construction of ecological civilization and promoting green development.Among them,green credit is the earliest and most mature financial instrument in the green financial system,and the "Green Credit Guidelines" issued by the China Banking Regulatory Commission in February 2012 is a programmatic policy document for China’s financial institutions to carry out green credit business,which is also the first time that green credit is elevated to a strategic level,promoting banks to incorporate environmental and social responsibility into loan evaluation indicators,and further strengthening credit to the green economy as well as energy conservation and environmental protection.To better support sustainable economic development,green finance needs to be supported by micro-enterprise entities.The active participation and transformation of micro-entities is necessary for relevant policy implementation and practice to be effective.Based on this,in order to construct the logic of micro governance performance and governance effect of green credit policy in a comprehensive and systematic way,this paper uses the Green Credit Guidelines as an important indicator for the construction of green credit system in China.First,from the entry point of enterprises’ investment and financing behaviors,the most intuitive resource allocation role of green credit policy as a financial tool for enterprises is explored.Second,the ultimate purpose of the policy is to achieve green transformation of economic and social development by guiding effective resource allocation and eliminating backward production capacity with high pollution and high emissions.This paper further studies how heavy polluting enterprises will make responses and adjustments to enhance their own green innovation capacity and achieve green transformation.Finally,the economic consequences of green credit policy implementation are explored in terms of the final implementation effect of the policy.Using data related to China’s listed companies in the heavy pollution industry from 2009-2019 as the research object,this paper first analyzes the investment and financing behavior of the Green Credit Guidelines in heavy pollution enterprises.The results show that(1)the Green Credit Guidelines have a significant negative effect on the scale of debt financing and debt financing cost of heavy polluting enterprises,and it is significant for long-term debt;(2)the Green Credit Guidelines,however,have a significant effect on the investment efficiency of heavy polluting enterprises,but this positive effect is weakened by the financial mismatch of enterprises.(3)Further exploring the external governance effect of the Green Credit Guidelines,we find that the effect of the Green Credit Guidelines on the investment and financing behavior of heavy polluters is more significant when the regional environmental regulation is weaker,the financial development is higher,and the green fiscal policy is stronger.Second,based on the Porter hypothesis,this paper further investigates the effect of the Green Credit Guidelines on green innovation of heavy polluters.We find that(1)the Green Credit Guidelines have a significant positive effect on the total green patent output of heavy polluters,but mainly promote the output of utility model green patents;(2)this positive effect is more significant in heavy polluters with strong financing constraints;(3)and through mechanism testing,we find that the greater the sunk cost and non-compliance cost of enterprises,the stronger the financing constraints will be.In turn,the more obvious the promotion effect of the Green Credit Guidelines on green innovation will be.(4)Finally,the heterogeneity analysis reveals that the positive effect of the Green Credit Guidelines on green innovation is more pronounced among the heavily polluting enterprises that are in a more competitive product market and state-owned enterprises.Finally,this paper examines the economic consequences of the micro governance effects of the Green Credit Guidelines,i.e.,the impact on firm value and regional environmental performance.It is found that(1)the Green Credit Guidelines have a "punitive effect" on heavy polluters and reduce their performance;(2)but the Green Credit Guidelines eventually promote regional environmental performance;(3)further study finds that the Green Credit Guidelines have a "punitive effect" on heavy polluters.(3)further study finds that the "penalty effect" of the Green Credit Guidelines on heavy pollution is more obvious in state-owned enterprises and largescale enterprises,and the improvement of environmental performance is more obvious in state-owned enterprises and large-scale enterprises;(3)finally,the analysis of regional heterogeneity finds that only the heavy polluters in central and western regions reduce the emission of sulfur dioxide,especially in western regions,and the improvement of their environmental performance is more significant.The innovations and contributions of this paper’s research are mainly reflected in the following four aspects.(1)Firstly the existing literature mostly studies the role of green credit on macroeconomic growth and industrial restructuring from a macro perspective,or mostly from the perspective of commercial banks,with limited attention to enterprises.The study in this paper takes a micro perspective and provides more evidence to support the understanding of the function and transmission mechanism of green credit compared to the existing literature.The function of green credit needs to be transmitted through micro-entities,and the effect of the policy depends on the response of firms to the policy.The research in this paper enriches the existing studies on the micro-effectiveness of green credit policies.(2)Secondly,the study on the impact of loan size and cost and investment efficiency of heavily polluting enterprises enriches the research on the factors influencing the investment behavior of heavily polluting enterprises,and finally verifies the "penalty effect" of green credit policy,which helps to clarify the financing and investment behavior of enterprises in the context of China’s current environmental governance,and provides an opportunity for enterprise It also provides a new solution for corporate regulators to achieve environmental governance from the perspective of credit resource allocation under the existing formal institutional framework.(3)Thirdly,this study provides direct empirical evidence for the "Porter hypothesis".Due to the difficulty of obtaining specific green patent data,there is a lack of research on the effectiveness of green credit policy innovations at the micro level.This paper explores the impact of green credit policies on enterprises’ green innovation ability in China,and further explores the impact mechanism of green credit policies,and finally verifies the "incentive effect" of green credit policies.This paper not only provides reliable empirical evidence for the causal relationship between green credit policy and green innovation,but also provides a reference for optimizing green financial policy and green innovation strategy in China.(4)Finally,this paper extends the study of the micro governance effects of green credit policies to the field of economic consequences.The study of the effects of green credit on enterprise performance and regional environment since its implementation and its mechanism of action enriches the research on enterprise performance and environmental performance,and is important for improving China’s green credit system and promoting the coordinated development of China’s economy and environment.