The Impact of Green Finance Policies on Corporate Debt Default Risk—Evidence from China
Round 1
Reviewer 1 Report
Comments and Suggestions for AuthorsThe manuscript addresses a highly relevant and timely topic with a strong methodological foundation and insightful findings. The analysis of green finance policies' effects on corporate debt risk, particularly the heterogeneity observed across firms and regions, is compelling and adds significant value to the field. However, there are areas where the clarity, depth, and presentation could be further improved.
The abstract would benefit from the inclusion of specific findings or numerical results to provide a clearer summary of the key outcomes. Similarly, the introduction could better situate the study within the broader context of global green finance efforts, which would enhance the paper's appeal to an international audience.
The theoretical framework is solid but could be strengthened with references to additional international studies and a more detailed discussion of the mechanisms driving financing constraints and technological risks in the context of green projects. Regarding methodology, while the approach is robust, it would be helpful to provide more justification for the selected study period and the choice of pilot zones. Explain the choice of study period and pilot zones in more detail. Simplify technical terms like the KZ index.
In the results and discussion sections, a deeper exploration of why polluting firms and enterprises in Eastern regions are more affected by green finance policies would add important nuance. Consider discussing additional factors, such as reputational risks or variations in policy enforcement, that could contribute to these findings. The policy implications are relevant but could include more actionable examples, such as specific financial tools or incentives designed to mitigate the challenges identified.
In terms of presentation, the clarity of tables could be improved by providing more descriptive labels and ensuring they are easier to interpret independently. Including visual elements, such as graphs or charts, would also enhance the presentation of key results.
Comments on the Quality of English LanguageThe quality of English in the manuscript is generally good and does not hinder understanding of the research. However, there are areas where clarity and readability could be improved. Some sentences are overly complex, and technical terms could be explained more simply to ensure accessibility to a broader audience. A thorough proofreading is recommended to address minor grammatical errors, improve sentence flow, and eliminate redundancies.
Author Response
We sincerely thank the reviewer for their thoughtful comments and valuable suggestions, which have helped us improve the manuscript significantly. Below, we address each point raised by the reviewer:
The manuscript addresses a highly relevant and timely topic with a strong methodological foundation and insightful findings. The analysis of green finance policies' effects on corporate debt risk, particularly the heterogeneity observed across firms and regions, is compelling and adds significant value to the field. However, there are areas where the clarity, depth, and presentation could be further improved.
R: Thank you very much for your recognition of our work. Below are our specific responses to your comments.
The abstract would benefit from the inclusion of specific findings or numerical results to provide a clearer summary of the key outcomes. Similarly, the introduction could better situate the study within the broader context of global green finance efforts, which would enhance the paper's appeal to an international audience.
R: We acknowledge your comments and have revised the abstract section to include more specific research findings, particularly regarding the results of the heterogeneity analysis. Additionally, we have amended the introduction to incorporate the international context of our research question.
The theoretical framework is solid but could be strengthened with references to additional international studies and a more detailed discussion of the mechanisms driving financing constraints and technological risks in the context of green projects. Regarding methodology, while the approach is robust, it would be helpful to provide more justification for the selected study period and the choice of pilot zones. Explain the choice of study period and pilot zones in more detail. Simplify technical terms like the KZ index.
R: We have enriched the discussion in the theoretical analysis section to provide a more detailed examination, particularly regarding the applicability of this topic in international research. In line with your suggestions, we have also expanded the explanation concerning the selection of the research period and study area, which you can find detailed in section 3.1, "Sample Selection and Data Sources." Additionally, we have simplified terminology such as the KZ index for clarity.
In the results and discussion sections, a deeper exploration of why polluting firms and enterprises in Eastern regions are more affected by green finance policies would add important nuance. Consider discussing additional factors, such as reputational risks or variations in policy enforcement, that could contribute to these findings. The policy implications are relevant but could include more actionable examples, such as specific financial tools or incentives designed to mitigate the challenges identified.
R: We are grateful for your suggestions. In the heterogeneity analysis section, we have added a discussion on the reasons behind the heterogeneous results. Furthermore, in the conclusion section, we have rewritten the discussion on the findings, particularly focusing on why polluting enterprises, eastern enterprises, and non-state-owned enterprises exert a greater impact. We have also provided more specific policy recommendations. For details, please refer to section 4.4, "Heterogeneity Test," and section 5, "Research Conclusions and Policy Recommendations."
In terms of presentation, the clarity of tables could be improved by providing more descriptive labels and ensuring they are easier to interpret independently. Including visual elements, such as graphs or charts, would also enhance the presentation of key results.
R: We have added annotations to the chart labels to facilitate understanding.
We believe that the revised manuscript has been strengthened by these changes, and we are grateful for the reviewer's constructive feedback. We hope that the revised version meets the reviewer's expectations.
Reviewer 2 Report
Comments and Suggestions for Authors1. The issue with the paper format is that, for example, in Chapter 2, the theoretical hypothesis section, H1a is formatted as bold and aligned to the left, but the formatting of the subsequent hypotheses is inconsistent. Additionally, the spacing before and after the three hypotheses is not uniform.
2. The study found that green finance policies significantly increased the risk of corporate debt defaults by intensifying financing constraints and reducing existing liquidity. However, the descriptions of H2a and H2b in the theoretical hypothesis section indicate a causal relationship, so it is recommended to rephrase them.
3. There is no space between the section numbers and the section titles.
4. The two mediating variables, Financing Constraints and Stock Liquidity, as well as the control variables, have not been stated with their definitions and data sources in the main text.
5. The innovation points of the paper are not clearly defined.
6. The number of references in the paper is relatively small, and the theoretical support is insufficient.
7. In terms of formatting standards, there are many formatting issues in the details of the paper. It is recommended to refer to the template for revisions.
Author Response
We sincerely thank the reviewer for their thoughtful comments and valuable suggestions, which have helped us improve the manuscript significantly. Below, we address each point raised by the reviewer:
- The issue with the paper format is that, for example, in Chapter 2, the theoretical hypothesis section, H1a is formatted as bold and aligned to the left, but the formatting of the subsequent hypotheses is inconsistent. Additionally, the spacing before and after the three hypotheses is not uniform.
R: Thank you very much for your careful comments. We have reviewed our formatting issues and made the necessary corrections.
- The study found that green finance policies significantly increased the risk of corporate debt defaults by intensifying financing constraints and reducing existing liquidity. However, the descriptions of H2a and H2b in the theoretical hypothesis section indicate a causal relationship, so it is recommended to rephrase them.
R: We highly value your feedback and acknowledge that there was a lack of clarity in the previous version regarding H2a and H2b. In the revised version, we have adjusted the explanations accordingly. You can find the specific changes in the section titled "2. Theoretical Analysis and Research Hypotheses."
- There is no space between the section numbers and the section titles.
R：Thank you for your comment. We have reviewed this issue and made the necessary amendments.
- The two mediating variables, Financing Constraints and Stock Liquidity, as well as the control variables, have not been stated with their definitions and data sources in the main text.
R: We appreciate your reminder; it was indeed an oversight on our part. In the revised version, we have provided further clarification on the data sources of the mediating variables within the "3.2.2 Variable Definition" section, and we have also included specific definitions in "Table 1 Variable Definition Table."
- The innovation points of the paper are not clearly defined.
R: We acknowledge your suggestion and recognize that the previous version lacked discussion on the innovative aspects. In the revised edition, we have placed emphasis on highlighting our points of innovation within the introduction section, specifically detailed in lines 68 through 77.
- The number of references in the paper is relatively small, and the theoretical support is insufficient.
R: We are grateful for your suggestion and have augmented our references to underscore the substantiation of the viewpoints presented in the article.
- In terms of formatting standards, there are many formatting issues in the details of the paper. It is recommended to refer to the template for revisions.
R: We are deeply grateful for your meticulous comments and have once again reviewed the formatting.
We believe that the revised manuscript has been strengthened by these changes, and we are grateful for the reviewer's constructive feedback. We hope that the revised version meets the reviewer's expectations.
Round 2
Reviewer 2 Report
Comments and Suggestions for Authors1. Although the methodology and models used in this study have been described in the main text, they are not mentioned in the abstract. It is recommended that the authors briefly summarize the methods or models applied in the study.
2.It is recommended that the author include some relevant references published in the journal of Sustainability to better align the theme of the article with the scope and requirements of the journal.
3. The authors should address potential endogeneity concerns more thoroughly. While instrumental variables are used, additional tests or alternative identification strategies would help establish causality more convincingly.
4. The tables and figures could be more effectively presented. Some are text-heavy and could be simplified to better highlight key findings. Consider adding visual elements to illustrate the theoretical framework.
5.It is recommended that the authors refine some writing of this paper to minimize the use of Chinglish.
Comments on the Quality of English LanguageIt is recommended that the authors refine some writing of this paper to minimize the use of Chinglish.
Author Response
Thank you again for your professional feedback. Based on your suggestions, we have made the following revisions:
Although the methodology and models used in this study have been described in the main text, they are not mentioned in the abstract. It is recommended that the authors briefly summarize the methods or models applied in the study.
Response: We have revised the abstract to highlight that we used the difference-in-differences model for the econometric analysis.
It is recommended that the author include some relevant references published in the journal of Sustainability to better align the theme of the article with the scope and requirements of the journal.
Response: We have added four references from the journal Sustainability.
The authors should address potential endogeneity concerns more thoroughly. While instrumental variables are used, additional tests or alternative identification strategies would help establish causality more convincingly.
Response: In line with your suggestion, we have included a lagged effect test to address potential endogeneity issues related to reverse causality.
The tables and figures could be more effectively presented. Some are text-heavy and could be simplified to better highlight key findings. Consider adding visual elements to illustrate the theoretical framework.
Response: Thank you for your suggestion. We have adjusted the format of some tables and figures to make them easier to read.
It is recommended that the authors refine some writing of this paper to minimize the use of Chinglish.
Response: Thank you for your suggestion. We have polished the writing to improve the clarity and flow of the language.
Once again, thank you for your valuable feedback. I wish you all the best!
