How does the Green Finance Pilot Policy (GFPP) in China impact the investment efficiency (IE) of industrial enterprises? Utilizing the establishment of green finance reform and innovation pilot zones in eight regions across five provinces in 2017 as a quasi-natural experiment, this paper applies the difference-in-differences method to assess the impact of the GFPP on the IE in the industrial sector. Our findings reveal that the GFPP significantly boosts IE by addressing issues of overinvestment. Furthermore, the GFPP enhances IE by reducing debt financing and improving information transparency. We recommend that policymakers further promote the GFPP and strengthen information disclosure regulations to guide rational investment in industrial enterprises.
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Lei et al. (2024) studied this question.
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