How Does Undertaking Environmental Responsibility Affect Bank Credit Risk?Based on the Perspective of Green Credit

How banks’ assumption of environmental responsibility affects their credit risk is an important issue that demands urgent research in the current context of sustainable development. This article adopts the perspective of green credit and utilizes the sample data of 131 listed and unlisted banks in China from 2005 to 2022 to construct a propensity score matching-multiple time-point difference-in-differences model for analyzing how undertaking environmental responsibility influences the credit risk of banks. The research discovers that green credit has a remarkable reduction effect on the credit risk of commercial banks. Secondly, the analysis of the adjustment mechanism reveals that the regional marketization level has a positive adjusting effect on the risk level of commercial banks implementing green credit, while the bank reputation level plays a negative adjusting role. Heterogeneity analysis shows that for listed commercial banks with large asset scales, sufficient liquidity, and located in the eastern region, the credit risk reduction effect of green credit is more significant. The research conclusion offers a reference basis for in-depth understanding of the influence of banks’ assumption of environmental responsibility and for the improvement of the credit risk supervision system of commercial banks.