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Green credit, green reputation, and corporate financial performance: evidence from China

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Abstract

The article combines green credit and the performance of listed banks in a theoretical and empirical analysis to explore the intrinsic correlation between the two and find the intrinsic motivation for banks to implement green credit. The article first reviews the current status of green credit research and theories related to green development in China and other countries and then analyzes the dynamics of green credit development and value creation, as well as the mechanisms by which green credit improves the financial performance of listed banks. Finally, the article explores the impact of green credit on the financial performance of listed banks through empirical analysis. Through a panel data model, this paper analyzes data related to 19 listed banks in China from 2008 to 2017 to investigate the impact of green credit on the financial performance of listed banks. This study has shown that the green credit ratio, as an indicator of the amount of green credit implemented by listed banks, will positively impact financial performance. But the impact of the current period and the one-period lag is more significant, while the effect of the two-period lag is not significant. The second major finding was that when green reputation is used as an indicator to measure the quality of green credit implementation of listed banks, listed banks’ financial performance can be significantly improved. Besides, this study has also found that green credit implementation generally has different impacts on different types of banks.

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Data availability

Most of the data generated or analyzed during this study are included in this published article. The remaining data sets used for analysis are available in the annual reports and social responsibility reports disclosed on the official websites of the sample listed banks, as well as financial data for the variables shown in the article obtained from WIND information and the CBRC (China Banking Regulatory Commission).

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Authors and Affiliations

  1. School of Economics and Trade, Henan University of Technology, Zhengzhou, 450001, China

    Bin Xi & Yaran Wang

  2. Faculty of Economics, University of Southampton, Southampton, SO17 1BJ, United Kingdom

    Mingqian Yang

Authors
  1. Bin Xi
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  2. Yaran Wang
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  3. Mingqian Yang
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Contributions

Bin Xi proposed the research topic and designed the research proposal. He was also responsible for the technical and material support in writing this thesis, provided and designed the methodology of the study, and was the supervisor of this thesis. Yaran Wang collected the research data required for the thesis and collated it. The statistical analysis was conducted and the accuracy of the empirical analysis process was verified. She focused on designing the framework for writing the thesis based on the empirical results obtained. Mingqian Yang researched and collated the literature, drafted, revised and translated the thesis, and conducted the final review of the final paper. As the corresponding author, she ensured the accuracy of the content described in the paper. She was also responsible for the submission and revision of the thesis.

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Correspondence to Mingqian Yang.

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Xi, B., Wang, Y. & Yang, M. Green credit, green reputation, and corporate financial performance: evidence from China. Environ Sci Pollut Res 29, 2401–2419 (2022). https://doi.org/10.1007/s11356-021-15646-z

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