Green Credit Policy and Corporate Foreign Direct Investment
Promoting economic transition towards green and low carbon is at the core of China's ecological civilization development philosophy.This paper uses the implementation of the"Green Credit Guidelines"in 2012 as a quasi-natural experiment and employs the Difference-in-Differences(DID)method to empirically test the impact of this green credit policy on corporate foreign direct investment(FDI).The results show that,compared to firms in non-polluting industries,the policy significantly increased the probability and scale of FDI for firms in polluting industries(hereinafter referred to as polluting firms).Mechanism analysis indicates that,on one hand,the policy increased credit constraints for polluting firms,inhibiting their productive investment in the domestic market and thereby motivating them to expand into international markets.On the other hand,through a motivating constraint mechanism,the policy incentivized polluting firms to innovate in green technology,thus enhancing their competitive advantage in international markets.We also find that the direct negative impact of credit constraints on firms'FDI did not dominate.Heterogeneity analysis shows that the policy effects are mainly concentrated in groups with high industry competitiveness,high technological content,and management with overseas backgrounds.Further analysis indicates that the policy improved the profitability and overseas revenue scale of polluting firms but did not significantly change their overall revenue scale.This paper enriches the research on the economic impacts of green credit policies,and signifies the important mutually reinforcing relationship between high-quality green development and high-quality opening up in China.
green creditforeign direct investmentgreen transitiongreen innovation
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