Research on the Relationship between Green Low-carbon Transformation and Capital Market Reactions

Abstract

Green low-carbon transformation can effectively elicit capital market reactions. Based on the annual reports of A-share listed enterprises from 2012 to 2019, this paper defines the green low-carbon transformation behavior of enterprises and uses event analysis to explore the capital market reactions caused by the green low-carbon transformation behavior of enterprises. The results show that the green low-carbon transformation of enterprises can produce significant “announcement” effect, which will bring significant impact effect to the capital market. The results of this paper are still significant after robustness tests for different sectors and different policy shocks. Further investigation shows that the increase in corporate costs and profitability are the key factors that lead to a significant capital market reactions. The research in this paper can provide an important basis for the green low-carbon transformation of enterprises and can further reveal the motivation of green low-carbon transformation of enterprises.