Go green: How does Green Credit Policy promote corporate green transformation in China

Abstract Our study explores the relationship between Green Credit Policy (GCP), bank competition, and corporate green transformation. Previous research mainly focused on the impact of GCP on corporate green practices from a single dimension, with limited attention to bank competition and the overall process of corporate green transformation. Using machine learning methods and Baidu Maps API, we innovatively construct indicators for the green transformation of Chinese A‐share‐listed companies and bank competition from 2007 to 2020. We treat China's Green Credit Guidelines as a quasi‐experiment and find that GCP has a positive impact on corporate green transformation, with bank competition strengthening this effect. Notably, the influence of state‐owned banks and foreign banks is more pronounced. Mechanism analysis indicates that alleviating financing constraints and promoting green behavior are critical mechanisms through which GCP affects green transformation. Furthermore, this effect is more pronounced in state‐owned enterprises, companies with high environmental transparency, regulated industries, and regions with stronger environmental regulations.