Carbon Trade and Digitalization

51 Pages Posted: 20 Sep 2024

See all articles by Yunqi Zhang

Yunqi Zhang

School of Finance, Nankai University; National University of Singapore

Xiaoyu Zhang

Central University of Finance and Economics

Multiple version iconThere are 2 versions of this paper

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

Zhang, Yunqi and zhang, xiaoyu, Carbon Trade and Digitalization (January 02, 2021). Available at SSRN: https://ssrn.com/abstract=4933772 or http://dx.doi.org/10.2139/ssrn.4933772

Yunqi Zhang

School of Finance, Nankai University ( email )

38 Tongyan Road, Jinnan District
Tianjin, Tianjin 300350
China

National University of Singapore ( email )

4 Architecture Drive
Singapore, 117566
Singapore

Xiaoyu Zhang (Contact Author)

Central University of Finance and Economics ( email )

770 Middle Road
Dresden, ME 04342
United States

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