Impact Of Green Credit On Cost Efficiency Of Commercial Banks

With the rapid development of the global economy and the continuous improvement of industrial levels,ecological issues have a significant impact on the sustainable development of the economy and society,attracting the attention of various countries.As an advocate of the green economy,China has made green finance an essential means to achieve the strategic goals of "carbon peak" and "carbon neutrality".Green credit,as the core financial instrument in the green financial system,guides capital flows into green low-carbon fields,optimizes resource allocation,and contributes to the transformation and upgrading of the industrial structure.However,during the implementation of green credit,commercial banks may face insufficient motivation.This thesis aims to explore the impact of green credit on the cost efficiency of commercial banks and provide references for their implementation.This thesis first outlines the relevant theories of green credit and cost efficiency.Then,using China Merchants Bank as a case study,the development status of green credit in Chinese commercial banks and the business and operational overview of China Merchants Bank are introduced.Subsequently,the problems of China Merchants Bank in the field of green credit are analyzed,and the New-Cost-DEA model is applied to measure its cost efficiency.Combining cost efficiency,a thorough analysis of the relevant problems is conducted.Finally,the research scope is expanded to the entire banking industry,using the three-stage DEA model based on the New-Cost-DEA to measure the cost efficiency of Chinese commercial banks,and applying both random and fixed effects Tobit models for empirical analysis to explore the impact of green credit on the cost efficiency of commercial banks.According to the case study and empirical analysis in this thesis,the following conclusions can be drawn.Firstly,at the individual level,green credit may have positive,negative,or relatively weak effects on the cost efficiency of banks in different stages of green credit development.Secondly,from the perspective of the entire banking industry,the expansion of green credit scale and the introduction of relevant policies in recent years have had a positive impact on the cost efficiency of Chinese commercial banks.Based on these findings,several suggestions are offered.Commercial banks can improve cost efficiency by expanding the scale of green credit,but should pay attention to strengthening capital management,ensuring efficient capital allocation,and focusing on the quality of green credit.Relevant departments need to increase policy support and guidance for green credit to achieve green finance goals while enhancing the cost efficiency of the entire banking industry.