The Impact of Carbon Emissions Trading on Corporate Environmental Performance--A Hybrid Study Based on PSM-DID and Dual Machine Learning

Abstract

In the context of "dual carbon", the green economy has gradually become the mainstream trend of economic development. As the main force of social production, the environmental governance behaviour of enterprises is crucial to China's economic transformation. Based on the panel data of Chinese A-share listed companies from 2011 to 2021, this study empirically examines, analyses the mechanism of action, and analyses the heterogeneity of enterprises using the PSM-DID model and the dual machine learning DML model. It is found that the carbon trading pilot policy significantly and positively affects firms' environmental performance, especially for non-state-owned enterprises, non-high-tech and manufacturing industries. In terms of spatial distribution, enterprises in the eastern and central regions are more significantly affected by the carbon trading pilot policy. In addition, the study also finds that executives' green awareness plays a partial mediating role in carbon trading's influence on firms' environmental performance through mediation effect analysis. Finally, the article puts forward recommendations for the government, enterprises and executives to promote the further application and effect of the carbon trading pilot policy in the enhancement of corporate environmental performance.