The impact of green credit on cash holdings of enterprises listed on the Ho Chi Minh Stock Exchange

Abstract

This research uses GMM regression methods to analyze the impact of green credit on cash holdings of enterprises listed on the Ho Chi Minh Stock Exchange (“HOSE”). The sample data includes 211 non-financial enterprises listed on HOSE in the period from 2015-2022. The research results show a significant positive impact of green credit policies on cash holdings of high-polluting enterprises. In addition, the study also analyzes the differences in the impact of green credit policies on cash holdings across years. In particular, it shows that 1-year before 2018 (the time the green credit policy was completed), high-polluting firms tended to hold less cash. And after 2018, the amount of cash held over the years by high-polluting firms tends to hold more. From there, this study provides evidence for policymakers, central banks and credit institutions to promote green credit policies with more forward-looking planning to avoid causing uncertainty, encourage high-polluting companies to strike a balance between operational efficiency and environmental protection, expanding the prior literature.