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Green credit policy and labor investment efficiency: evidence from China

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Abstract

Green finance plays a crucial role in driving green development. By leveraging the implementation of the “Green Credit Guidelines” as a quasi-natural experiment in 2012, our study provides compelling evidence that this green credit policy enhances the efficient investment in labor. Our mechanism analysis indicates that the positive impact primarily stems from the upgrading of human capital and the mitigation of agency conflicts. Moreover, we find that the effect of the green credit policy on the efficient investment in labor by green credit-restricted firms is more pronounced when these firms face robust environmental law enforcement and operate with low labor intensity. Additionally, the enhanced investment in labor demonstrates a significant positive influence on future enterprise value. Overall, our findings underscore the significant improvement in corporate labor investment efficiency resulting from the successful implementation of the Green Credit Guidelines.

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Funding

This work was supported by the National Natural Science Foundation of China (Grant numbers [No. 72302088]), the Postdoctoral Science Foundation of China (Grant numbers [No. 2021M701194]), the Shanghai Soft Science Projects (Grant numbers [No. 23692121000]), and the Fundamental Research Funds for the Central Universities of China (Grant numbers [No. JKN02232204, JKN02222203]).

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Authors and Affiliations

  1. East China University of Science and Technology, No. 130, Meilong Road, Xuhui, Shanghai, 200237, China

    Ying Liu, Junqiu Wang & Canyu Xu

Authors
  1. Ying Liu
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  2. Junqiu Wang
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  3. Canyu Xu
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Contributions

All authors contributed to the study conception and design. Material preparation, data collection, and analysis were performed by Ying Liu, Junqiu Wang, and Canyu Xu. The first draft of the manuscript was written by Ying Liu, and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

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Correspondence to Canyu Xu.

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Appendix

Appendix

Table 11 Definitions of variables
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Liu, ., Wang, J. & Xu, C. Green credit policy and labor investment efficiency: evidence from China. Environ Sci Pollut Res 30, 110461–110480 (2023). https://doi.org/10.1007/s11356-023-30058-x

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