Mandatory Carbon Disclosures and the Transition of Corporate Production Technologies

83 Pages Posted: 8 May 2024

See all articles by Jianqiang Chen

Jianqiang Chen

Ocean University of China

Pei-Fang Hsieh

National Tsing Hua University - Department of Quantitative Finance

Po-Hsuan Hsu

National Tsing Hua University

Abstract

In the U.S., carbon emissions escalated with patent applications until the Greenhouse Gas Reporting Program (GHGRP) mandated firms to disclose emissions. In this study, we show that, post-GHGRP, firms with a greater amount of inefficient CO2 emissions produce significantly more low-carbon patents (as classified by the Cooperative Patent Classification system as well as our text-based keyword search method), which in turn significantly reduces CO2 emissions and increases market value. We provide possible internal and external channels for corporate production technology transitions, which focus on ESG-based executive compensation, the stringency of local environmental regulations, and the coverage of climate risk-sensitive analysts.

Keywords: greenhouse gas, innovation, Environmental Regulations, climate change

Suggested Citation

Chen, Jianqiang and Hsieh, Pei-Fang and Hsu, Po-Hsuan, Mandatory Carbon Disclosures and the Transition of Corporate Production Technologies. Available at SSRN: https://ssrn.com/abstract=4821100 or http://dx.doi.org/10.2139/ssrn.4821100

Jianqiang Chen

Ocean University of China ( email )

5 Yushan Road
Qingdao, 266003
China

Pei-Fang Hsieh (Contact Author)

National Tsing Hua University - Department of Quantitative Finance ( email )

101, Section 2, Kuang-Fu Road
Hsinchu, Taiwan 300
China
886-3-5162132 (Phone)

Po-Hsuan Hsu

National Tsing Hua University ( email )

No. 101, Section 2, Guangfu Road, East District
Hsin Chu 3, 300
China

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