Digital Environmental Regulation and Corporate Loan Pricing: Evidence from China——A Research based on OLS model using Stata Software
Year: 2025
Type: conference-paper
Abstract: This paper examines how real-time digital environmental regulation affects corporate loan pricing, based on OLS model using Stata Software. Using granular loan-level data from a major Chinese lender from 2007-2013, combined with emissions monitoring listings and financial information on borrowing firms, we analyze the impact of being designated for mandatory digital emissions surveillance. Our difference-in-differences models indicate that imposition of pollution monitoring requirements associates with improved lending terms. Specifically, interest rates are approximately 0.065-0.086 percentage points lower for digitally regulated firms relative to the control group after accounting for time trends. Overall, by enabling more accurate risk appraisals, real-time environmental compliance enforcement can curb lending costs. These findings illuminate potential synergies and trade-offs between regulatory objectives related to environmental sustainability, technological oversight, financial stability and economic growth.
Authors: Yuhui Dang, Jian Sun, Yafang Zhu, Liyi Zhu
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
SDG: Climate action
Open Access status: gold
OpenAlex ID: W4412055602