The impact of carbon emission reduction inputs of power generation enterprises on the cost of equity capital.

Abstract

This paper aims to encourage power generation enterprises to actively carry out emission reduction activities by studying the impact of carbon emission reduction investment on long-term development. The existing literature mainly studies the interaction between national economic development and energy consumption at the macro level, and the impact of environmental protection investment by enterprises at the micro level on the short- and long-term economic consequences. However, there is still a large space for research on how specific emission reduction measures lead the long-term development of enterprises. Therefore, this paper chooses to introduce enterprise competitiveness, government subsidy, and management shareholding ratio respectively to conduct intermediary test and grouping regression, and empirically studies the mechanism of carbon emission reduction input of Chinese power generation enterprises on the cost of equity capital from 2013 to 2020. The results show that management shareholding can enhance the initiative of enterprises to reduce emissions. At the same time, carbon emission reduction investment can effectively reduce the cost of equity capital by improving the competitiveness of enterprises and forming a reputation mechanism faster. This study reveals the significance of carbon emission reduction investment as an important part of enterprise environmental protection investment, and emphasizes that the government and enterprises can effectively avoid the short-sighted tendency of enterprises and improve the long-term development power of enterprises by adjusting government subsidies, management shareholding ratio and other policies.