Although green credit has become a crucial financial tool for promoting sustainable development worldwide, it may have unintended consequences, such as encouraging speculative behavior among heavily polluting enterprises. This study investigates the impact of the Green Credit Policy (GCP) on the use of accrual-based earnings management practices by heavily polluting enterprises in China. Leveraging panel data from listed companies in China, the results reveal a significant upward earnings management following the implementation of the GCP in 2012. The impact is more pronounced in companies with weaker internal control quality, lower cash flows, and greater financing constraints, as well as those audited by the Big Four auditing firms. The study also indicates that the GCP’s impact on earnings management is transmitted through profitability and reputation channels. The findings contribute to the understanding of the economic impact of GCP and have practical implications for the sustainable development of heavily polluting enterprises.
History
Table of Contents
Chapter 1: Introduction -- Chapter 2: Institutional Background and Hypothesis Development -- Chapter 3: Research Design -- Chapter 4: Results -- Chapter 5: Conclusions – References -- Appendix 1. Pollution-intensive Industry and Code -- Appendix 2. Variable Definitions -- Appendix 3. Descriptive Statistics -- Appendix 4. VIF Test -- Appendix 5. PSM-DID Match Result -- Appendix 6. Supplement to the Channel Test
Awarding Institution
Macquarie University
Degree Type
Thesis MRes
Degree
Master of Research
Department, Centre or School
Department of Applied Finance
Year of Award
2024
Principal Supervisor
Rui Xue
Additional Supervisor 1
Qing Zhou
Rights
Copyright: The Author
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