An Exploration of How Short-term Debt for Long-term Use Affects Enterprises’ Green Development?—Micro Evidence from Enterprises

Abstract

Abstract: The maturity mismatch of investment and financing, typically characterized by short-term debt for long-term Use (SDLU), affects Chinese enterprises’ development performance. This study combines mathematical modelling with empirical analysis to deeply analyze the internal mechanism of how maturity mismatch affects enterprises’ environmental performance. Then, by matching the Chinese data of Environmental Survey and Industrial Annual Survey, this study examines the impact and mechanism of how SDLU affects enterprises’ environmental performance. Our research finds that the SDLU has a negative effect on corporate environmental performance from both energy-saving and emission-reduction perspectives. Such an effect still holds after a series of robustness tests. We demonstrate that the investment distortion caused by SDLU may be the root reason underlying the negative effect. Specifically, this investment distortion mainly has a negative effect on enterprises’ environmental performance, through the crowding out effect of green investment and the over-investment effect of traditional fixed asset investment. Further analysis shows that such a negative effect exacerbates as the concentration of local banking industry increases. Also, the above negative effect is more significant in the industries facing stricter environmental regulation, provinces with lower knowledge density or firms under higher financial pressure. Based on the above findings, this paper enriches the empirical evidence on the consequences of SDLU on micro-level enterprises, and provides insights for the government to promote green development of enterprises through deepening financial reforms.

Key words: maturity mismatch of investment and financing, short-term debt for long-term use, environmental performance, energy-saving and emission-reduction, green development

He Xiaogang, Teng Ruifeng. An Exploration of How Short-term Debt for Long-term Use Affects Enterprises’ Green Development?—Micro Evidence from Enterprises[J]. Management Review, 2025, 37(6): 40-52.

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