Green finance and corporate environmental violations: a test from the perspective of illegal pollution discharge behaviors.

Green finance aims to intervene in investment and financing behaviors through financial means, so as to promote upgrading of heavily polluting industries. Whether it can reduce illegal pollution discharge behaviors is the focus of this paper. This paper is to explore the impact of green finance on illegal emissions of heavy polluting firms. Taking green finance pilot zones (GFPZ) in 2017 as a quasi-natural experiment, the paper measures illegal emission behaviors based on day-night difference of PM2.5 at the nearest atmospheric monitoring points and tests the impact of GFPZ on illegal emissions based on triple difference model (DDD). The results show that GFPZ inhibits illegal emissions. Influence path result shows that GFPZ reduces illegal emissions by increasing financing constraint, green innovation, and fulfilling social responsibility. At the same time, this paper also notes that regulatory distance has an interference effect on GFPZ. GFPZ aggravates illegal emission as heavy polluting firms - financial institution's distance is more than 40 km. GFPZ curbs illegal pollution more significantly as heavy polluting firms - environmental protection bureau distance is within 30 km. This paper aims to reveal the guiding effect of green finance on emission behavior of polluting firms and provide policy references for reducing emission and promoting green finance.