Yao, S.Pan, Y.Şensoy, AhmetUddin, G. S.Cheng, F.2022-02-092022-02-092021-090140-9883http://hdl.handle.net/11693/77196We explore the effect of green credit policy on firm performance of listed firms in China. We find that green credit policy reduces firm performance in heavily polluting industries. This effect is more prominent in state-owned enterprises, firms with large size, high institutional ownership, high analyst coverage and during high economic policy uncertainty period. Moreover, we observe that green credit policy decreases heavily polluting firms' performance by increasing firm financing constraints and decreasing investment level. Our results help to restrain heavily polluting enterprises and promote industrial transformation in developing markets.EnglishGreen credit policyFirm performanceFinancial constraintsInvestmentChinaArticle10.1016/j.eneco.2021.105415