1. Evaluating the impact of carbon emissions trading scheme on Chinese firms' total factor productivity.
- Author
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Xiao, Jin, Li, Guohao, Zhu, Bing, Xie, Ling, Hu, Yi, and Huang, Jing
- Subjects
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CARBON offsetting , *INDUSTRIAL productivity , *CARBON emissions , *EMISSIONS trading , *PANEL analysis - Abstract
In the context of addressing climate change and promoting high-quality development, it is necessary to evaluate the impact of carbon emissions trading scheme (ETS) on China's total factor productivity (TFP). Based on a quasi-experimental design, we provide firm-level evidence of TFP improvement from China's pilot ETSs. Using panel data of Chinese listed firms during 2009–2018, the difference-in-differences method is adopted to evaluate the impact of ETS on the firm-level TFP. The results show that the ETS significantly improves the firm-level TFP, increasing it in pilot regions by approximately 14% when compared with non-pilot regions. Further analysis shows that this improvement is not affected by the heterogeneity of firms' ownership, but by industrial heterogeneity. Moreover, this improvement is realized by promoting firms' operating and profitability capacity. We also find that the impact of ETS on firm-level TFP is stable and exhibits no time lag. Our findings not only improve the effectiveness evaluation framework of the Chinese ETS, but also have some implications for how to promote the construction of a national carbon emissions trading market in the context of high-quality development. [Display omitted] • We evaluate the impact of China's ETS on firm-level TFP with the DID method. • ETS significantly improve the firm-level TFP in the pilot regions. • The policy effects are affected by the heterogeneity across industries. • The impact of the ETS on firm-level TFP is stable and exhibits no time lag. • The promotion of firm-level TFP by the ETS does not stem from innovation capacity. [ABSTRACT FROM AUTHOR]
- Published
- 2021
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