Ultra-low emission standards and corporate production performance: Evidence from Chinese thermal power companies

Finding ways to use coal efficiently and reduce its impact on air pollution is a long-term task that will take sustained work. The impact of ultra-low emission standards (ULES) on corporate productive performance cannot be ignored. Taking the implementation of ULES as a quasi-natural experiment, and using data for listed companies from 2010 to 2018, this paper studies the influence of ULES on the upgrading of thermal power plants using a difference-in-difference (DID) model. The results indicate that ULES significantly inhibits improvements in the productivity of thermal power corporations. This conclusion remained valid after a PSM-DID estimation, the interference of carbon emission trading policy and the 13th Five-Year Plan double control index management on the regression coefficient was eliminated, and a placebo test was used to eliminate interference from other unobservable factors. Further analysis shows that ULES affect corporate productive performance by increasing costs, squeezing out innovation, and reducing efficiency. Moreover, non-state-owned corporations, corporations with highly constrained finances, and corporations in China's eastern region are more obviously affected by ULES. Although ULES for thermal power generation has significantly improved environmental performance, the design of environmental standards should also consider the economic costs, and risks of the green and low-carbon transition process.