Carbon emissions reduction: Crowding out or feeding back on corporate profitability?

Zhehao Huang, Yaya Su and Yuanqi Zhao

Finance Research Letters, 2025, vol. 74, issue C

Abstract: This study examined the effect of carbon emissions reduction on corporate profitability. We theoretically prove that carbon emissions reduction would crowd out corporate profitability in the short run, shifting into a feeding-back effect in the long run. The findings provide reliable evidence for the synergy between environmental regulation and economic development.

Keywords: Carbon emissions reduction; Financial performance; Dynamic programming; Environmental regulation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:74:y:2025:i:c:s1544612324017185

DOI: 10.1016/j.frl.2024.106689

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