Navigating Shades of Green: Credit Policy, Corporate Social Responsibility Dynamics, and Institutional Lessons for Transition Economies - Graphical Abstract
Zize Wei, Dandan Li, Souha Balti and Sui Sui published an article entitled “Navigating Shades of Green: Credit Policy, Corporate Social Responsibility Dynamics, and Institutional Lessons for Transition Economies” in Volume 31, Issue 1 of the Journal of East European Management Studies (JEEMS).
This study examines whether green credit policies effectively encourage firms to adopt stronger corporate social responsibility (CSR) practices. Using China’s 2012 Green Credit Guidelines as a natural policy experiment, we analyze data from 3627 publicly listed Chinese companies between 2010 and 2020 using a difference-in-differences research design. Our findings reveal that green credit policies may unintentionally discourage CSR engagement among highly polluting firms. The primary mechanism appears to be increased financial constraints imposed by credit restrictions. However, firms with higher total factor productivity (TFP) are better able to absorb these constraints, and the negative effect weakens once productivity surpasses a certain threshold. This suggests that firm productivity plays an important moderating role in determining whether green financial policies achieve their intended environmental objectives. Overall, the study highlights the complexity of aligning financial regulation with corporate sustainability goals. The findings suggest that green credit policies should be carefully designed to avoid unintended disincentives for CSR investment, particularly among pollution-intensive firms. These insights provide important policy implications for transition economies seeking to promote sustainable development through financial regulation.
Read the article:
Navigating Shades of Green: Credit Policy, Corporate Social Responsibility Dynamics, and Institutional Lessons for Transition Economies
https://www.imrpress.com/journal/JEEMS/31/1/10.31083/JEEMS39852
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