Abstract
With the development of ecological paradigm coupled with the relentless implementation of myriad environmental policies in China, the rapid development of carbon emission trading and carbon trading market has had a vital impact on the financial performance of enterprises at the microlevel. This study has sampled the A-share listed companies in China, from 2009 to 2018, and adopted the difference-in-difference (DID) method to investigate the effect of the carbon emission trading on corporate financial performance from the microlevel. Evidence showed that the implementation of carbon emission trading effectively improved the total asset-liability ratio of enterprises, though it reduced the value of the current capital market. Moreover, in the regions under strict legal environment, the enhancement effect of the total asset-liability ratio was more obvious, whereas in the regions under loose legal environment, the reduction effect of the value of the capital market was more obvious. Further analysis showed that the implementation of carbon emission trading could not promote Chinese enterprises to increase R&D investment. Hence the implementation of carbon emission trading has improved the level of non-business income of enterprises incorporated into the trading system, but its impact on the investment income of enterprises was not significant.
Highlights
The control of greenhouse gas emission is an important issue figuring out in the current development of all countries across the globe
Its conclusions provide a theoretical basis for the enterprises to enhance their own value by participating in carbon trading, which demonstrates that the listed companies can improve their corporate environmental management and corporate financial performance by actively participating in the environmental rights trading businesses such as quota trading, Chinese Certified Emission Reduction (CCER) trading, and carbon finance
The results showed that the regression results of time treated on tobinsQ were basically consistent with the above one, and the significance of time treated on Roa that improved and in a loose legal environment showed a negative correlation at the 10% level, further verifying that H3a was on another dimension
Summary
The control of greenhouse gas emission is an important issue figuring out in the current development of all countries across the globe. Its conclusions provide a theoretical basis for the enterprises to enhance their own value by participating in carbon trading, which demonstrates that the listed companies can improve their corporate environmental management and corporate financial performance by actively participating in the environmental rights trading businesses such as quota trading, Chinese Certified Emission Reduction (CCER) trading, and carbon finance. It has enriched the literature about testing the Porter Hypothesis in the Chinese context. It is inevitable for the government and carbon trading institutions to further improve the prevalent market mechanism
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