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How Does China’s Carbon Emissions Trading Policy Affect the Financing of High-Carbon Enterprises?

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  • Yue-Jun Zhang
  • Wei Wang

Abstract

Evaluating the impact of carbon emissions trading (CET) policy on the operations and development of high-carbon enterprises is of great practical importance in a context where policy-makers aim to balance steady growth and reduce carbon emissions. Based on the panel data of A-share listed enterprises, this paper comprehensively employs the difference-in-differences (DID) and the difference-in-differences based propensity score matching (PSM-DID) methods to investigate the impact of China’s CET policy on the financing constraints and financing ability of high-carbon enterprises. The results indicate that: first, the level of financing constraints of high-carbon enterprises in China has significantly increased with the implementation of the CET policy from 2012 to 2019. Second, the impact shows significant heterogeneity in various industries, carbon markets, and the characteristics of enterprises. Third, the CET policy reduces the long-term debt financing ability of high-carbon enterprises by 22.26 percent during the sample period, but it has no significant impact on short-term debt financing ability. JEL Classification: C33, D92, G32, Q43, Q58

Suggested Citation

  • Yue-Jun Zhang & Wei Wang, 2024. "How Does China’s Carbon Emissions Trading Policy Affect the Financing of High-Carbon Enterprises?," The Energy Journal, , vol. 45(4), pages 223-245, July.
    • Handle: RePEc:sae:enejou:v:45:y:2024:i:4:p:223-245
    DOI: 10.1177/01956574241281564
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    Keywords

    carbon emissions trading; high-carbon enterprises; DID model; PSM-DID model; financing constraints; financing ability;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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