Corporate Financial Performance in the China Emission Trading Scheme: Evidence From China Listed Firm

48 Pages Posted: 27 Jan 2021

See all articles by Yizhe Dong

Yizhe Dong

University of Edinburgh Business School

Liang Xi

University of Edinburgh - Edinburgh Business School

Tianju Wang

University of Edinburgh Business School

Date Written: October 12, 2020

Abstract

Different ETS allowance distribution method may vary the effeteness of the ETS on the regulated firm’s performance. This paper uses the Propensity Score Matching Difference-in-Differences method found that the China ETS could increase its regulated firm competitiveness from different aspects. Furthermore, we have tested the impact of the carbon price and its volatility on firm financial performance. Different from the traditional view on the impact of the carbon price, this paper has found that growing the carbon price would benefit regulated firm financial performance, but higher volatility is harmful to the performance.

Keywords: Carbon emission trading, Carbon price, Competitiveness, China, PSM-DID

JEL Classification: C23, G30, K32, Q50, Q58

Suggested Citation

Dong, Yizhe and Xi, Liang and Wang, Tianju, Corporate Financial Performance in the China Emission Trading Scheme: Evidence From China Listed Firm (October 12, 2020). Available at SSRN: https://ssrn.com/abstract=3726020 or http://dx.doi.org/10.2139/ssrn.3726020

Yizhe Dong

University of Edinburgh Business School ( email )

Old College
South Bridge
Edinburgh, Scotland EH8 9JY
United Kingdom

Liang Xi

University of Edinburgh - Edinburgh Business School

29 Buccleuch Pl
Edinburgh, Scotland EH8 9JS
United Kingdom

Tianju Wang (Contact Author)

University of Edinburgh Business School ( email )

Edinburgh
United Kingdom
07410115152 (Phone)

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