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China’s Carbon Emission Trading Scheme and Firm Performance

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  • Rongting Sun
  • Kaiqi Wang
  • Xiangjin Wang
  • Jie Zhang

Abstract

We empirically investigate the effect of emissions trading scheme (ETS) on the corporate performance of Chinese listed firms from 2010 to 2016, treating China’s pilot ETS as a quasi-natural experiment. Our difference-in-differences analysis shows that the ETS is significantly correlated with corporate performance of high-energy-consuming firms. While the policy effect strengthens in the first few years and then weakens by 2016. This indicates that ETS cannot sustainably and steadily affect the corporate performance. Finally, we find that ETS has a stronger impact on the performance of high-energy-consuming firms in regions with high governmental intervention and an underdeveloped legal system.

Suggested Citation

  • Rongting Sun & Kaiqi Wang & Xiangjin Wang & Jie Zhang, 2022. "China’s Carbon Emission Trading Scheme and Firm Performance," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(3), pages 837-851, February.
    • Handle: RePEc:mes:emfitr:v:58:y:2022:i:3:p:837-851
    DOI: 10.1080/1540496X.2021.1925535
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    Cited by:

    1. Junguo Hua & Di Zhu & Yunfei Jia, 2022. "Research on the Policy Effect and Mechanism of Carbon Emission Trading on the Total Factor Productivity of Agricultural Enterprises," IJERPH, MDPI, vol. 19(13), pages 1-19, June.

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