How does the green credit policy affect the technological innovation of enterprises? Evidence from China

Using 2008–2017 data on 1036 Chinese A-share listed companies, we investigate the impact of the green credit policy (GCP) on corporate technological innovation (TI). We argue that the promulgation of the 2012 "Green Credit Guidelines" (GCG) can be seen as a quasi-natural experiment. Employing a difference-in-differences (DID) model to more effectively approximate the effect of the GCP, we find that (i) the GCP significantly promoted TI in highly polluting and energy-intensive enterprises (HEEs) in terms of both quantity and quality. (ii) The effect of the GCP on the TI of HEEs was asymmetric, reflecting different effects on firms with different property rights and sizes. (iii) Profitability and ownership concentration (OC) enhanced the role of the GCP in promoting TI. (iv) Agency costs (ACs) weakened the role of the GCP in promoting TI. These findings have implications for designing better GCPs to promote corporate innovation.