Huge Green Transformation of Heavily Polluting Enterprises: The Role of Bank Competition

As environmental standards continue to tighten, the green practices of heavily polluting enterprises have increasingly become the focus of public attention. Existing research suggests that bank competition plays an important role in shaping corporate decision-making. Using panel data from listed companies in heavily polluting industries in China from 2007 to 2020, this study finds that bank competition significantly promotes the green transformation of these enterprises. Further heterogeneity analysis shows that this effect is more pronounced among firms with higher financing constraints, those located in regions with stricter environmental regulations, and those operating in more competitive industries. Mechanism analysis reveals that bank competition facilitates green transformation by alleviating financing constraints, enabling firms to access more long-term loans, expand overall credit financing, and reduce financing costs.