An Empirical Analasys Of The Effect Of Green Credit On Commercial Banks' Performance

With the rapid growth of China's economy,the environmental problems brought by economic growth have been increasingly prominent.In 2007,"Opinions on implementing environmental protection policies and regulations to prevent credit risks" was released by SEPA,PBoC and China Banking Regulatory Commission.Since then,the concept of "green credit" has been formally proposed in China.After years of development,Chinese commercial banks have gradually built up the system of green credit.The main issue that this paper is working on is the effect of green credit on the performance of commercial banks.It is assumed that green credit has got some kind of effect on banks'asset quality and management,which are main factors that determine banks' performance.18 listed Chinese commercial banks in 2008-2016 are used as samples in this paper.A panel data regression model is set up,which is estimated with GMM.Estimations of the models reveal that(1)The larger the bank's total asset size is,the lower the NPLs and CIR will be;(2)The coefficient of green credit to bank's performance is positive at 5%significant level.Empirical results show that the implementation of green credit does improve the performance of(listed)commercial banks.Based on the empirical analysis,a few suggestions on further development of green credit are given in the end of this paper.As green credit has got positive influence on banks' performance,we should bring out incentives to banks so that they are more willing to expand the scale of green credit business.Furthermore,to make green credit business more efficient,the cost of collecting information about environment protection should be reduced.