Can the Carbon Trading Policy Enhance Resource Allocation Efficiency?—An Analysis of the Synergistic Effect of Market Mechanism and Government Intervention

Yunqing Zhao, Debao Dai, Wei Shao () and Liang Ye
Additional contact information
Yunqing Zhao: School of Management, Shanghai University, Shanghai 200444, China
Debao Dai: School of Management, Shanghai University, Shanghai 200444, China
Wei Shao: Scientific Research Management Department, Shanghai University, Shanghai 200444, China
Liang Ye: Office of Admissions and Career Services, Shanghai University, Shanghai 200444, China

Sustainability, 2024, vol. 16, issue 22, 1-24

Abstract: The carbon trading pilot policy is a key policy to achieve low-carbon development through market mechanism. Studying the impact of carbon trading on resource allocation efficiency can provide an important empirical basis to achieve energy saving and green development. This paper delves into the influence of carbon trading on resource allocation efficiency by utilizing the multiperiod difference-in-differences based on comprehensive provincial data spanning from 2011 to 2020 in China. The findings show that carbon trading can promote the optimization of capital allocation efficiency but negatively affect the labor allocation efficiency in the pilot areas. This conclusion still holds through various robustness tests. Further research on regional heterogeneity shows that there are significant differences in the impact of resource allocation efficiency and labor allocation efficiency between eastern and western regions. Crucially, the limited scope of the carbon market’s direct influence on labor allocation efficiency is highlighted, demonstrating the need for government intervention to amplify its optimization effects based on the synergistic effect. It provides vital empirical insights for China’s ongoing pursuit of energy-saving and green development strategies, emphasizing the synergies between market mechanisms and government regulation in fostering sustainable economic transformation.

Keywords: carbon trading; resource allocation efficiency; difference-in-differences with multiple time periods; carbon market; government intervention (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/22/10128/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/22/10128/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:22:p:10128-:d:1525188

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().