Carbon Trading Pilots and Firms’ Green Innovation: Evidence from China’s Listed Company
DOI:
https://doi.org/10.54097/fbem.v9i3.9576Keywords:
Carbon trading pilots, Firms’ green innovation, China’s listed company.Abstract
Firms’ green innovation is important for their sustainable development. Determinants of firms’ green innovation has been discussed by social scientists, among which, carbon trading is a significant perspective. However, the current literature has not obtained consistent findings on this issue, possibly because causality has been challenged by the issue of endogeneity. This is not conducive to efficient policy instruments from existing findings. Using the carbon trading pilots in China in 2011 and 16 as quasi-experiment, we constructed dataset of 9,998 listed companies from 2000-2021 to empirically test the effect of carbon trading pilots on firms' green innovation by using the staggered Difference-in-Differences (DID) method. The results show that carbon trading pilots increased the quantity of green innovation while had no effect on their quality, and remain robust after a series robustness tests. We also discuss the mechanism from the perspective of externalities. The paper thus highlights the necessity of piloting carbon trading and lowing externalities in fostering firms’ green innovation.
Downloads
References
Paraschiv, D. M., Nemoianu, E. L., Langă, C. A., & Szabó, T. (2012). Eco-innovation, responsible leadership and organizational change for corporate sustainability. Amfiteatru Economic Journal, 14(32), 404-419.
Zheng, C., Deng, F., Zhuo, C., & Sun, W. (2022). Green credit policy, institution supply and enterprise green innovation. Journal of Economic Analysis, 1(1), 20-34.
Amore, M. D., & Bennedsen, M. (2016). Corporate governance and green innovation. Journal of Environmental Economics and Management, 75, 54-72.
Yao, S., Yu, X., Yan, S., & Wen, S. (2021). Heterogeneous emission trading schemes and green innovation. Energy Policy, 155, 112367.
Liu, M., & Li, Y. (2022). Environmental regulation and green innovation: Evidence from China's carbon emissions trading policy. Finance Research Letters, 48, 103051.
Liu, M., Shan, Y., & Li, Y. (2022). Study on the effect of carbon trading regulation on green innovation and heterogeneity analysis from China. Energy Policy, 171, 113290.
Chen, Z., Jin, J., & Li, M. (2022). Does media coverage influence firm green innovation? The moderating role of regional environment. Technology in Society, 70, 102006.
Dechezleprêtre, A., & Sato, M. (2017). The Impacts of Environmental Regulations on Competitiveness. Review of Environmental Economics and Policy, 11(2), 183–206.
Ambec, S., & Barla, P. (2005). Can Environmental Regulations be Good for Business? An Assessment of the Porter Hypothesis. Energy Studies Review, 14.
Van Leeuwen, G., & Mohnen, P. (2017). Revisiting the Porter hypothesis: An empirical analysis of Green innovation for the Netherlands. Economics of Innovation and New Technology, 26(1–2), 63–77. https://doi.org/10.1080/10438599.2016.1202521
Nancy, S. (2015). Carbon emissions in China. Main. https://energy.mit.edu/news/carbon-emissions-in-china/
Song, D., Zhu, W., & Wang, B. (2021). Micro-empirical evidence based on China’s carbon trading companies: Carbon emissions trading, quota allocation methods and corporate green innovation. China Population. Resources and Environment, 31.
Yang, S., Jahanger, A., & Hossain, M. R. (2023). How effective has the low-carbon city pilot policy been as an environmental intervention in curbing pollution? Evidence from Chinese industrial enterprises. Energy Economics, 118, 106523.
UNFCCC. (n.d.-a). Emissions Trading. Emissions Trading | UNFCCC. Retrieved January 14, 2023, from https://unfccc.int/process/the-kyoto-protocol/mechanisms/emissions-trading
UNFCCC. (n.d.-b). What is the Kyoto Protocol? What Is the Kyoto Protocol? | UNFCCC. Retrieved January 14, 2023, from https://unfccc.int/kyoto_protocol
European Commission. (n.d.). EU Emissions Trading System (EU ETS). Retrieved January 14, 2023, from https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en
Wang, W., & Zhang, Y. J. (2022). Does China's carbon emissions trading scheme affect the market power of high-carbon enterprises?. Energy Economics, 108, 105906.
Ambec, S., Cohen, M. A., Elgie, S., & Lanoie, P. (2013). The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? Review of Environmental Economics and Policy, 7(1), 2–22.
Nie, Q. (2020). Analysis of policy effect of carbon emission trading on power generation industry. Energy Environmental Protection, 34(6). https://d.wanfangdata.com.cn/periodical/ChlQZXJpb2RpY2FsQ0hJTmV3UzIwMjMwMTEyEg9ta2hqYmgyMDIwMDYwMTIaCGR6M2RvZ2Uy
Spash, C. (2010). The Brave New World of Carbon Trading. New Political Economy, 15(2).
Downloads
Published
Issue
Section
How to Cite
