ANALYSIS OF THE IMPACT OF GREEN CREDIT ON THE PROFITABILITY OF CHINESE COMMERCIAL BANKS


Wan Jing
,
Abstract

 Since opening to the outside world, China's economy has developed rapidly, but the contradiction between economic development mode and ecological environment has become increasingly prominent. Therefore, the government has decided to make green development and ecological civilization construction a major task of the 13th five-year plan. And because the bankindustry is the backbone of economic development, its profitability has also attracted the attention of the government. The government decided to develop green credit as a major measure to protect China's ecological environment and improve the profitability of Banks. Therefore, this paper focuses on the analysis of whether green credit will have a positive impact on the profitability of Chinese commercial Banks.

Firstly, this paper introduces the main achievements of green credit research. Secondly, it expounds the influencing factors of bank profitability. Finally, basing on the data of 10 Banks from 2009 to 2017, I establish the fixed effect regression model to obtain the empirical analysis results.The result of this paper shows that there is a short-term inverse relationship between green credit and bank profitability, which is inconsistent with the theoretical results. Therefore, how to solve such a short-term dilemma, give play to the positive role of green credit, and thus develop into long-term interests is the most important task at present. This paper draws conclusions through empirical results and puts forward corresponding policy suggestions, hoping to help China promote the development of green credit.

KEYWORDS: Green credit, Bank earnings, The panel model

Keywords:
Journal Name :
EPRA International Journal of Economic and Business Review(JEBR)

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Vol : 7
Issue : 5
Month : May
Year : 2019
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