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Exquisite workmanship through net-zero emissions? The effects of carbon emission trading policy on firms' export product quality

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  • Zhang, Dongyang
  • Kong, Qunxi
  • Wang, Yizhi
  • Vigne, Samuel A.

Abstract

China introduced the “Notice on Launch of the Pilot Work of Carbon Emissions Trading” in 2011 as an economic policy to tackle environmental problems and promote high-quality economic development through market mechanisms. Using the DID (difference-in-differences) method, this study examines the impact of this policy on the export product quality of enterprises. To measure the export product quality, we matched Chinese customs import and export data with Chinese A-share listed company data and constructed the requirement residual using the demand information inversion method. Our results show that the carbon emission trading policy has a persistent negative effect on improving the export product quality of enterprises, which varies depending on the characteristics of the enterprise and the external environment. We also found that the policy's implementation is not associated with improvements in enterprise environmental or economic performance. To provide additional analysis, we constructed a regression model of enterprise export product quality on enterprise environmental performance and economic performance. Overall, this study provides insights for policymakers on the variations in export product quality of microcosmic enterprises in response to the carbon emission trading policy, which is critical for achieving net-zero emissions.

Suggested Citation

  • Zhang, Dongyang & Kong, Qunxi & Wang, Yizhi & Vigne, Samuel A., 2023. "Exquisite workmanship through net-zero emissions? The effects of carbon emission trading policy on firms' export product quality," Energy Economics, Elsevier, vol. 123(C).
    • Handle: RePEc:eee:eneeco:v:123:y:2023:i:c:s0140988323001998
    DOI: 10.1016/j.eneco.2023.106701
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