The ESG peer effect of green finance on brown firms: based on convergent competition and imitation learning perspective

Abstract

Purpose

Examining the impacts and specific paths of the green credit policy on the ESG peer effect of brown firms from the behavioral economics perspective.

Design/methodology/approach

We selected A-share listed companies from 2009 to 2022 as the research sample and constructed a difference-in-differences (DID) estimation model based on the issuance of the “Green Credit Guidelines” in 2012 as a natural experiment. From the perspective of behavioral economics, we examined the impact of green credit policies on the peer effect of ESG responsibility fulfillment of brown enterprises and the specific paths.

Findings

We find that the green credit policy significantly enhances the ESG peer effect of brown firms, which is asymmetric under a multilevel contextual reference.

Originality/value

We construct a peer ESG normative objective model under the new LIM framework, prove the existence of Nash equilibrium under any peer preference parameter ß and consider the peer ESG utility maximization function under green finance shocks.

Citation

Seng, J. and Zhang, L. (2025), "The ESG peer effect of green finance on brown firms: based on convergent competition and imitation learning perspective", China Finance Review International, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/CFRI-03-2024-0143