Abstract
Against the global drive to combat climate change and advance sustainable development, green credit has emerged as a pivotal financial instrument, directing capital toward new energy sectors and fueling eco-friendly economic transitions. This study investigates the impact of green credit policy (GCP) on the scale and cost of debt financing among Chinese new energy enterprises, utilizing 2009–2022 data and a difference-in-differences methodology. Distinct from prior green finance research—which rarely targets new energy enterprises despite their critical role in carbon neutrality—we focus explicitly on this understudied group. The findings indicate GCP significantly expands new energy enterprises’ debt financing scale while lowering costs, thereby supporting the new energy sector’s high-quality development. Furthermore, GCP’s effects vary by ownership: state-owned enterprises gain more from expanded financing scale, whereas non-state-owned firms benefit more from reduced financing costs. Regionally, eastern and central areas excel in lowering debt financing costs, whereas the western and northeastern regions stand out in expanding the financing scale. An analysis of the mechanisms reveals that GCP strengthens new energy companies’ financing capabilities by easing financial constraints, boosting investment efficiency, and increasing returns. These findings offer empirical insights into the real impacts of GCP, providing valuable guidance for enhancing green finance strategies.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data availability
The datasets used and/or analysed during the current study are available from the sources informed in the article or from the corresponding author on reasonable request.
References
Biddle, G. C., Hilary, G., & Verdi, R. S. (2009). How does financial reporting quality relate to investment efficiency? Journal of Accounting and Economics, 48(2–3), 112–131. https://doi.org/10.1016/j.jacceco.2009.09.001
Caragnano, A., Mariani, M., Pizzutilo, F., & Zito, M. (2020). Is it worth reducing GHG emissions? Exploring the effect on the cost of debt financing. Journal Of Environmental Management, 270, Article 110860. https://doi.org/10.1016/j.jenvman.2020.110860
Chai, S., Zhang, K., Wei, W., Ma, W., & Abedin, M. Z. (2022). The impact of green credit policy on enterprises’ financing behavior: Evidence from Chinese heavily-polluting listed companies. Journal of Cleaner Production, 363, Article 132458. https://doi.org/10.1016/j.jclepro.2022.132458
Chang, K., Zeng, Y., Wang, W., & Wu, X. (2019). The effects of credit policy and financial constraints on tangible and research & development investment: Firm-level evidence from china’s renewable energy industry. Energy Policy, 130, 438–447. https://doi.org/10.1016/j.enpol.2019.04.005
Chen, F., Liu, J., Yang, Z., Dusengemungu, D. R., & Zhang, H. (2023). Does water risk increase corporate debt financing capacity? Evidence from listed companies in high-water sensitive industries in China. Journal of Cleaner Production, 415, Article 137858. https://doi.org/10.1016/j.jclepro.2023.137858
Chen, Z., Yin, M., & Zhou, M. (2022). Does environmental regulatory pressure affect corporate debt financing? Resources, Conservation and Recycling, 184, Article 106405. https://doi.org/10.1016/j.resconrec.2022.106405
Cui, Y., Khan, S. U., Li, Z., & Zhao, M. (2021). Environmental effect, price subsidy and financial performance: Evidence from Chinese new energy enterprises. Energy Policy, 149, Article 112050. https://doi.org/10.1016/j.enpol.2020.112050
Duan, K., Qin, C., Ma, S., Lei, X., Hu, Q., & Ying, J. (2025). Impact of ESG disclosure on corporate sustainability. Finance Research Letters, 78, 107134. https://doi.org/10.1016/j.frl.2025.107134
Ghouma, H., Ben-Nasr, H., & Yan, R. (2018). Corporate governance and cost of debt financing: Empirical evidence from Canada. The Quarterly Review of Economics and Finance, 67, 138–148. https://doi.org/10.1016/j.qref.2017.06.004
Gigante, G., & Manglaviti, D. (2022). The ESG effect on the cost of debt financing: A sharp RD analysis. International Review of Financial Analysis, 84, Article 102382. https://doi.org/10.1016/j.irfa.2022.102382
Hadlock, C. J., & Pierce, J. R. (2010). New evidence on measuring financial constraints: Moving beyond the KZ index. Review of Financial Studies, 23(5), 1909–1940. https://doi.org/10.1093/rfs/hhq009
He, L., Liu, R., Zhong, Z., Wang, D., & Xia, Y. (2019a). Can green financial development promote renewable energy investment efficiency? A consideration of bank credit. Renewable Energy, 143, 974–984. https://doi.org/10.1016/j.renene.2019.05.059
He, L., Zhang, L., Zhong, Z., Wang, D., & Wang, F. (2019b). Green credit, renewable energy investment and green economy development: Empirical analysis based on 150 listed companies of China. Journal of Cleaner Production, 208, 363–372. https://doi.org/10.1016/j.jclepro.2018.10.119
He, Y., & Liu, R. Z. (2023). The impact of the level of green finance development on corporate debt financing capacity. Finance Research Letters, 52, Article 103552. https://doi.org/10.1016/j.frl.2022.103552
Hu, Y., Jiang, H., & Zhong, Z. (2020). Impact of green credit on industrial structure in China: Theoretical mechanism and empirical analysis. Environmental Science and Pollution Research, 27, 10506–10519. https://doi.org/10.1007/s11356-020-07717-4
Huang, Y., Shu, M., Liu, F., Liu, B., Huang, C., & Wang, S. (2025). Nonlinear heterogeneity impact of El Niño-Southern Oscillation on energy markets: A global perspective analysis. Energy, 137475,. https://doi.org/10.1016/j.energy.2025.137475
Jiang, J., Pei, J., & Zhang, M. (2024). Green credit and firms’ span of global production stages. China Economic Review. https://doi.org/10.1016/J.CHIECO.2024.102263. 102263.
Kempa, K., Moslener, U., & Schenker, O. (2021). The cost of debt of renewable and non-renewable energy firms. Nature Energy, 6(2), 135–142.
Khan, M. A., Qin, X., Jebran, K., & Rashid, A. (2020). The sensitivity of firms’ investment to uncertainty and cash flow: Evidence from listed state-owned enterprises and non-state-owned enterprises in China. Sage Open. https://doi.org/10.1177/2158244020903433
Kornai, J. (1986). The soft budget constraint. Kyklos, 39(1), 3–30. https://doi.org/10.1111/j.1467-6435.1986.tb01252.x
Lai, X., Quan, L., Guo, C., et al. (2024). Can ESG reconcile the conflicting motives of cash holding? Evidence from China. Empirical Economics, 68(4), 1719–1756. https://doi.org/10.1007/s00181-024-02533-4
Lai, X., Quan, L., Guo, C., et al. (2025). Exploring the digital era: Has digital technology innovation reshaped investment efficiency in Chinese enterprises? Research in International Business and Finance, 75, Article 102729. https://doi.org/10.1016/j.ribaf.2024.102729
Lai, X., Yue, S., Guo, C., et al. (2023). Does fintech reduce corporate excess leverage? Evidence from China. Economic Analysis and Policy, 77, 281–299. https://doi.org/10.1016/j.eap.2022.11.017
Lee, C. C., Wang, F., & Chang, Y. F. (2023a). Towards net-zero emissions: Can green bond policy promote green innovation and green space? Energy Economics, 121, Article 106675. https://doi.org/10.1016/j.eneco.2023.106675
Lee, C. C., Wang, F., Lou, R., & Wang, K. (2023b). How does green finance drive the decarbonization of the economy? Empirical evidence from China. Renewable Energy, 204, 671–684. https://doi.org/10.1016/j.renene.2023.01.058
Li, F., & Di, H. (2021). Analysis of the financing structure of China’s listed new energy companies under the goal of peak CO2 emissions and carbon neutrality. Energies, 14(18), Article 5636. https://doi.org/10.3390/en14185636
Li, W., Xu, J., & Zheng, M. (2018). Green governance: New perspective from open innovation. Sustainability, 10(11), 3845. https://doi.org/10.3390/su10113845
Li, W., Zheng, M., Zhang, Y., & Cui, G. (2020). Green governance structure, ownership characteristics, and corporate financing constraints. Journal of Cleaner Production, 260, Article 121008. https://doi.org/10.1016/j.jclepro.2020.121008
Li, Y., Jia, Z., Qin, C., Li, Z., & Ying, J. (2025). Analysis of recycling and emission reduction models under carbon taxes and government subsidies. International Review of Economics & Finance, 99, Article 104052. https://doi.org/10.1016/j.iref.2025.104052
Lin, B., & Zhang, A. (2023). Government subsidies, market competition and the TFP of new energy enterprises. Renewable Energy, 216, Article 119090. https://doi.org/10.1016/j.renene.2023.119090
Liu, J. Y., Xia, Y., Fan, Y., Lin, S. M., & Wu, J. (2017). Assessment of a green credit policy aimed at energy-intensive industries in China based on a financial CGE model. Journal of Cleaner Production, 163, 293–302. https://doi.org/10.1016/j.jclepro.2015.10.111
Liu, Q., Bai, Y., & Song, H. (2023). The crowding out effect of government debt on corporate financing: Firm-level evidence from China. Structural Change and Economic Dynamics, 65, 264–272. https://doi.org/10.1016/j.strueco.2023.03.005
Liu, T., Yin, Z., Fan, M., Korkmaz, A. G., & Yue, P. (2024). Green credit policy and asset-debt maturity mismatch in highly polluting enterprises: Evidence from China. Economic Analysis and Policy. https://doi.org/10.1016/J.EAP.2024.08.002
Liu, X., Wang, E., & Cai, D. (2019). Green credit policy, property rights and debt financing: Quasi-natural experimental evidence from China. Finance Research Letters, 29, 129–135. https://doi.org/10.1016/j.frl.2019.03.014
Liu, Z., Li, W., Hao, C., & Liu, H. (2021). Corporate environmental performance and financing constraints: An empirical study in the Chinese context. Corporate Social Responsibility and Environmental Management, 28(2), 616–629. https://doi.org/10.1002/csr.2073
Luo, W., Guo, X., Zhong, S., & Wang, J. (2019). Environmental information disclosure quality, media attention and debt financing costs: Evidence from Chinese heavy polluting listed companies. Journal of Cleaner Production, 231, 268–277. https://doi.org/10.1016/j.jclepro.2019.05.237
Lv, C., Fan, J., & Lee, C. C. (2023). Can green credit policies improve corporate green production efficiency? Journal of Cleaner Production, 397, Article 136573. https://doi.org/10.1016/j.jclepro.2023.136573
Ma, D., He, Y., & Zeng, L. (2024). Can green finance improve the ESG performance? Evidence from green credit policy in China. Energy Economics, Article 107772. https://doi.org/10.1016/J.ENECO.2024.107772
National Development and Reform Commission, People's Bank of China, Ministry of Ecology and Environment, Ministry of Housing and Urban-Rural Development, Ministry of Industry and Information Technology, Ministry of Natural Resources, & National Energy Administration. (2019). Guiding Catalogue for the Green Industry (2019). China Water Risk. https://cwrrr.org/regulation/guiding-catalogue-for-the-green-industry-2019/
Pigou, A. C. (1920). The economics of welfare. Macmillan and co. ltd.
Qin, S., & Xiong, Y. (2022). Innovation strategies of Chinese new energy vehicle enterprises under the influence of non-financial policies: Effects, mechanisms and implications. Energy Policy, 164, Article 112946. https://doi.org/10.1016/j.enpol.2022.112946
Raimo, N., Caragnano, A., Zito, M., Vitolla, F., & Mariani, M. (2021). Extending the benefits of ESG disclosure: The effect on the cost of debt financing. Corporate Social Responsibility and Environmental Management, 28(4), 1412–1421. https://doi.org/10.1002/csr.2134
Richardson, S. (2006). Over-investment of free cash flow. Review of Accounting Studies, 11, 159–189. https://doi.org/10.1007/s11142-006-9012-1
Santos, A., & Cincera, M. (2022). Determinants of financing constraints. Small Business Economics, 58(3), 1427–1439. https://doi.org/10.1007/s11187-021-00449-w
Shi, J., Yu, C., Li, Y., & Wang, T. (2022). Does green financial policy affect debt-financing cost of heavy-polluting enterprises? An empirical evidence based on Chinese pilot zones for green finance reform and innovations. Technological Forecasting And Social Change, 179, Article 121678. https://doi.org/10.1016/j.techfore.2022.121678
Stiglitz, J. E., & Weiss, A. (1981). Credit rationing in markets with imperfect information. American Economic Review, 71(3), 393–410.
European Commission Technical Expert Group on Sustainable Finance (TEG). (2020). Final report on the EU taxonomy. https://finance.ec.europa.eu/system/files/2020-03/200309-sustainable-finance-teg-final-reporttaxonomy_en.pdf
Wang, T., Wen, C. Y., & Seng, J. L. (2014). The association between the mandatory adoption of XBRL and the performance of listed state-owned enterprises and non-state-owned enterprises in China. Information & Management, 51(3), 336–346. https://doi.org/10.1016/j.im.2014.02.006
Wang, Y. Y. (2023). Corporate diversification, investment efficiency and the business cycle. Journal of Corporate Finance, 78, Article 102353. https://doi.org/10.1016/j.jcorpfin.2023.102353
Wu, Y., & Huang, S. (2022). The effects of digital finance and financial constraint on financial performance: Firm-level evidence from China’s new energy enterprises. Energy Economics, 112, Article 106158. https://doi.org/10.1016/j.eneco.2022.106158
Xu, B. (2024). Fostering green technology innovation with green credit: Evidence from spatial quantile approach. Journal of Environmental Management, Article 122272. https://doi.org/10.1016/j.jenvman.2024.122272
Ying, J., Su, H., He, S., Qiu, G., & Chen, X. (2025). Belief dispersion in credit markets: Evidence from CDS-Bond basis. Finance Research Letters, 86, 108076. https://doi.org/10.1016/j.frl.2025.108076
Zhang, M., Zhang, X., Song, Y., & Zhu, J. (2022a). Exploring the impact of green credit policies on corporate financing costs based on the data of Chinese A-share listed companies from 2008 to 2019. Journal of Cleaner Production, 375, Article 134012. https://doi.org/10.1016/j.jclepro.2022.134012
Zhang, S., Wu, Z., He, Y., & Hao, Y. (2022b). How does the green credit policy affect the technological innovation of enterprises? Evidence from China. Energy Economics, 113, 106236.https://doi.org/10.1016/j.jclepro.2020.124991
Zhang, Z., Luo, C., Zhang, G., Shu, Y., & Shao, S. (2024). New energy policy and green technology innovation of new energy enterprises: Evidence from China. Energy Economics, 136, Article 107743. https://doi.org/10.1016/j.eneco.2024.107743
Zhou, C., Zhang, H., Ying, J., He, S., Zhang, C., & Yan, J. (2025). Artificial intelligence and green transformation of manufacturing enterprises. International Review of Financial Analysis, 104330. https://doi.org/10.1016/j.irfa.2025.104330
Zhou, W., Lu, S., Chen, J., & Gou, X. (2020). How good or how poor have China’s new energy enterprises done: An empirical study based on the lagged double-market network. Journal of Cleaner Production, 262, Article 121284. https://doi.org/10.1016/j.jclepro.2020.121284
Funding
This is part of the research achievements of the National Social Science Fund Youth Project: Model Construction and Policy Research on Rural "Zero-Carbon Energy Prosumerage System" Based on Integration of Production, Storage, and Consumption(25CJL035); Joint Research Project on Meteorological Capability Enhancement of the China Meteorological Administration: The Research of Sub-Seasonal Mechanism, Influence, and Prediction of Combined Cold Rain-Snow Events in South China (23NLTSZ003).
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Informed consent Statement
Not applicable.
Conflict of interest
The authors declare no competing interests
Additional information
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Chen, M., Shi, X., Huang, Y. et al. Solving the mystery of debt financing for new energy firms: a quasi-natural experiment from a market-based environmental regulation. Environ Dev Sustain (2025). https://doi.org/10.1007/s10668-025-06912-y
Received:
Accepted:
Published:
Version of record:
DOI: https://doi.org/10.1007/s10668-025-06912-y