Research On The Impact Of Green Credit On The Profitability Of Commercial Banks In China

In the past,China’s economic development philosophy was to develop first and then govern,and this crude development model has caused very serious damage to China’s natural environment,such as serious environmental pollution and harsh climate change......In recent years,China has realized that environmental protection is increasingly important for economic development,and in order to protect the ecological environment and promote the development of a green economy In order to protect the ecological environment and promote the development of green economy,China has elevated the green finance policy to the height of national strategy.Under the government’s promotion,China has promulgated laws and regulations related to green finance,given policy advice to banks and other financial institutions,vigorously supported the development of environmental protection enterprises,and restricted the flow of funds to the "two high and one leftover" enterprises.When commercial banks implement green credit,its economic benefits can influence whether banks want to promote the business more actively.Therefore,this paper will investigate what is the link between green credit and commercial banks’ profitability.This paper consists of five chapters.Chapters 1 and 2 provide the theoretical foundation for this paper,focusing on the definition of green credit after a review of the literature on green finance,a brief description of green finance theory,and a detailed description of the factors and mechanisms by which green credit can affect the profitability of commercial banks.On this basis,the third chapter elaborates the current situation of green credit in China and analyzes the problems from the aspects of green credit policy,investment direction of funds and credit products.In terms of empirical evidence,the data of 18 banks from 2010 to 2021 are selected as samples,and empirical modeling is used to analyze and test the development of green credit and bank profitability in China.The analysis finds that the implementation of green credit has a negative impact on the profitability of commercial banks,which is also verified in further robustness tests and heterogeneity tests.Finally,based on the current situation and empirical findings on green credit,countermeasures are proposed for commercial banks,government and enterprise levels to promote the effective development of green credit business from multiple perspectives.