Examining The Influence Of Management Strategies On Green Loans, Enhanced Risk Management, And Business Opportunities In Chinese Banks

Abstract

Climate change deserves the full focus of academics since it is a critical and immediate problem. Consequently, many banks now provide "green finance" to businesses who pledge to combat climate change via the launch of low-carbon initiatives. Nevertheless, the problem of inadequate green financing persists. In order to address this funding gap, this empirical study examines green finance in China from the perspective of the Chinese financial institutions that provide these loans. Following the Chinese government's release of the Green Credit Policy, green financing in the country has seen fast growth. Green loans might be offered by banks for a variety of reasons, such as to mitigate compliance risk, expand the company's commercial potential, safeguard the company's reputation, or manage credit risk. The primary purpose of this article is to investigate the claims that green loans enhance risk management and boost business potential. In this researcher have researched and analyzed the Chinese banking system and its Green Credit Policy. This research highlights a unique aspect of China's banking system—the substantial participation of the government—and speculates on the possible role of the government in the spread of green financing in China. The goal of creating this dataset was to enable quantitative analysis, hence a panel design was used. From 2009 to 2015, twenty-four different Chinese banks contributed data on green banking and green financing to the collection. To determine if the banks' participation in green financing improved their bottom lines, researchers used panel regression techniques including Random-effect Panel Regression and Two-stage Least Square Regression Analysis.