Green credit policy, government subsidy, and enterprises "shifting from virtual to real".

Taking the green credit policy in 2012 as a quasi-natural experiment, this paper uses the difference-in-differences method to explore the impact of green credit policy on enterprises' financial asset allocation and the moderating effect of government subsidy. We find that green credit policy significantly promotes the financial asset allocation of heavy-polluting enterprises, which is mainly reflected in short-term liquid financial investment, thus supporting the precautionary motivation of holding financial assets. The mechanism analysis shows that green credit policy promotes the financial asset allocation of heavy-polluting enterprises by reducing the scale of debt financing and increasing the financing cost. Government subsidy can significantly weaken the promoting effect of green credit policy on enterprises' financial asset allocation, and there is heterogeneity due to the regional environmental regulation intensity and financial development level. Further analysis shows that the negative moderating effect of government subsidy on green credit policy and enterprises' financial asset allocation significantly promotes the "shifting form virtual to real" of heavy polluting enterprises by reducing financial asset allocation. This paper discusses the impact of green credit policy on financial asset allocation of heavy-polluting enterprises in China and further clarifies the significant role of government subsidy in the process, so as to provide suggestions for government to control the "shifting from real to virtual" of enterprises. The results also provide an important reference for countries, especially developing countries, to implement green credit policy and government subsidy to achieve sustainable economic development. [ABSTRACT FROM AUTHOR]