How does green credit policy affect total factor productivity of the manufacturing firms in China? The mediating role of debt financing and the moderating role of environmental regulation.

Treating the green credit policy issued in 2012 as a quasi-natural experiment, this study has investigated the impact of green credit policy on total factor productivity of the manufacturing firms in China by using the panel data of the A-share firms listed on the Shanghai and Shenzhen stock exchanges during 2008 and 2020, with the consideration of the mediating role of debt financing and the moderating role of environmental regulation simultaneously. The results show that green credit policy has a negative effect on total factor productivity of the manufacturing firms in China. Empirical evidence also shows that debt financing could oppositely mediate the nexus between green credit policy and total factor productivity of the manufacturing firms in China by both inhibiting long-term loans and promoting short-term loans. In addition, the moderating role of environmental regulation is partially and conditionally established. Furthermore, the regional heterogeneity and the property rights heterogeneity are proved. Finally, conclusions and policy implications are provided to improve the quality of green credit policy in the future.