New industrial policy and corporate digital transformation: Empowering or impairing? Emerging evidence from green credit policy

The Green Credit Policy (GCP) is a vital governmental practice promoting green development through financial support. This study employs a Difference-in-Differences method to investigate the impact of GCP on the digital transformation of firms (DT) using data from Chinese A-share listed companies spanning 2007 to 2022. Results reveal that the DT is significantly inhibited after the government implements GCP. This inhibitory effect is mainly produced by reducing technological innovation, increasing environmental protection investment, and strengthening financing constraints. This study also identifies that increased government investment in digital infrastructure, increased marketization, and enhanced R&D backgrounds of executives can potentially diminish the negative impact of GCP on DT. Our findings contribute to a better response to the climate challenge and provide valuable references for accelerating DT.