More Green, Better Funding? Exploring the Dynamics between Corporate Bank Loans and Trade Credit

As a critical aspect of corporate financing strategies, high-quality trade credit has been acknowledged as favorable indicator for external stakeholders. Given the increasing prominence sustainable development, it is worthwhile to explore whether an advanced environmental management system facilitates attainment business operations. Therefore, respond this question, study utilizes panel data spanning from 2012 2021, comprising Chinese listed firms in four energy and environment-related sectors, with dimension score CSI ESG scoring employed categorizing sample into high low governance groups. The results reconcile conflicting studies find inverted U-shaped effect between bank loans lower levels governance. Within domain characterized by higher governance, two are substituted each other. In addition, introduces Shapely decomposition method first time quantify contribution loans. Drawing these findings, we proposed practical advice firms, financial institutions, government on how choose against background development.