*Article* **The Impact of Green Credit on the Green Innovation Level of Heavy-Polluting Enterprises—Evidence from China**

**Zhifeng Zhang 1, Hongyan Duan 2, Shuangshuang Shan 3,\*, Qingzhi Liu 4,\* and Wenhui Geng <sup>1</sup>**


**Abstract:** This article uses the "Green Credit Guidelines" promulgated in 2012 as an example to construct a quasi-natural experiment and uses the double difference method to test the impact of the implementation of the "Green Credit Guidelines" on the green innovation activities of heavypolluting enterprises. The study found that, in comparison to non-heavy polluting enterprises, the implementation of green credit policies inhibited the green innovation of all heavy-polluting enterprises. In the analysis of heterogeneity, this restraint effect did not differ significantly due to the nature of property rights and the company's size. The mechanism test showed that green credit policy limits the efficiency of business investment and increases the cost of financing business debt. Eliminating corporate credit financing, particularly long-term borrowing, negatively impacts the green innovation behavior of listed companies.

**Keywords:** green credit; heavy pollution enterprise; green innovation; investment efficiency; financing constraint; difference-in-difference model
