Carbon Trade and Digitalization
51 Pages Posted: 20 Sep 2024
There are 2 versions of this paper
Carbon Trade and Digitalization
Regulation-Induced Digitalization
Date Written: January 02, 2021
Abstract
This paper investigates how environmental regulation induces firm digitalization. We construct a digital index based on textual analyses and find that after the implementation of the program, pilot firms' digitalization increased relative to that of a group of carefully matched control firms, which is opposite to the findings in the extant literature on technology adoption. This increase cannot be fully explained by regional unobservables, firms' own innovation, firm selection, or other policies. The results are robust when we consider firm subsidiaries. The increase in digitalization is not due to regulatory arbitrage, and the industry-level concentration of digitalization changes little.
Keywords: Environmental Regulation, Technology Adoption, Digitalization, Carbon Emissions Trading, Climate Change JEL Classifications: O33
Suggested Citation: Suggested Citation