Development of green finance, tourism, and corporate access to bank loans in China.

ABSTRACT

The fundamental purpose of this study is to conduct an inquiry into the efficacy of China's green credit strategy, and that is the core focus of the investigation. As part of this study, we investigate whether or not businesses that increase the environmental transparency of their operations to the outside world and green innovation within their operations are rewarded with more favorable bank loan terms as a direct result of receiving green credit. Specifically, we look at whether or not these businesses are awarded green credit. Our hypothesis is put to the test by using difference-in-differences (DID) model and the data that was collected from a sample of 1086 publicly traded Chinese manufacturers over the years 2012 to 2017. According to the data, businesses that improve the quality of their environmental disclosures do not receive an increase in their access to corporate finance. On the other hand, businesses that introduce new environmentally friendly (tourism) breakthroughs do receive an increase in their access to corporate finance. Our research demonstrates that the root of the problem is corporate greenwashing, a practice that is common in regions with low environmental disclosure standards and makes it more difficult for businesses to obtain new loans. This practice is popular in areas where environmental disclosure standards are lax. This is the most basic explanation for why the phenomena occur in the first place. Our findings contribute to the literature on themes including green credit policy, corporate green innovation, environmental transparency, and green financing and tourism, all of which are useful to corporations, governments, and financial institutions.