The Impact of Low-carbon Policy on Financing Costs of Heavily Polluting Enterprises

Carbon reduction policies are a core tool for driving the green transformation of the economy, significantly impacting the financing costs of heavily polluting enterprises. This study employs a difference-in-differences (DID) model to empirically examine the effect of carbon reduction policies on the financing costs of heavily polluting enterprises. The findings indicate that carbon reduction policies significantly increase the financing costs of heavily polluting enterprises. The mechanism test shows that increased financing constraints and the shift from long-term to short-term debt play a mediating role in the impact of carbon reduction policies on financing costs. Moreover, the impact of carbon reduction policies on the financing costs of heavily polluting enterprises exhibits significant heterogeneity. There is no significant impact on the financing cost increases of state-owned enterprises and those in eastern regions, whereas the increases are more pronounced for private enterprises and those in western regions. The conclusions of this study provide crucial theoretical support and practical guidance for improving carbon reduction policies, promoting the green transformation of enterprises, and enhancing environmental governance.