IntroductionWe test whether identity-based green credit improves or worsens firms’ environmental compliance under discretionary enforcement.MethodsUsing a firm-year panel of 2,376 listed firms, we link banks’ green-credit status to environmental penalty records and estimate fixed-effects models aided by a shift-share instrument, alongside extensive falsification and robustness checks.ResultsRelative to comparable firms, green-credit recipients are 19.7% more likely to receive environmental penalties, with stronger effects among privately owned firms; greater enforcement standardization attenuates this pattern.DiscussionIdentity-based green credit can backfire under discretionary enforcement; performance-based eligibility and more standardized enforcement can mitigate the risk.
Observations from the Little Bunker
Last updated: October 16, 2025 02:57 AM
Atmospheric CO₂
424.4 ppm
+18.2
ppm/year
Atmospheric CH₄
1933.54 ppb
+12.29
ppb/year
Global Temperature
+1.48 °C
Peak: +1.73°C
World Population
8.1 billion
+67
million/year