Emission trading policy and firm-level carbon disclosure in China: Unveiling the potential of market-based environmental regulation

Wei Li, Yuanyuan Man, Jianing Liu, Yongda He and Yang Hu

Research in International Business and Finance, 2025, vol. 79, issue C

Abstract: Corporate compliance with environmental obligations and the cultivation of reputations are intricately tied to the effectiveness of carbon disclosure. The emission trading policy, as a market-based environmental regulatory tool, has the potential to influence the micro-level environmental behavior of businesses. Focusing on China's heavily polluting industries, we employ the double machine learning (DML) method to investigate the impact and mechanisms of market-based environmental regulations on firm-level carbon disclosure in this study. The results demonstrate a significant positive effect of market environmental regulations on voluntary carbon information disclosure, particularly in the realm of low-carbon strategic disclosure. This effect is notably strengthened with increased levels of corporate green innovation and enhanced market competitiveness. Furthermore, the findings from the analysis of heterogeneity highlight the significance of accounting for differences in environmental governance pressure, industry structure, and executive environmental awareness when formulating targeted policy implications.

Keywords: Market-based environmental regulation; Corporate carbon disclosure; China; Double machine learning method (search for similar items in EconPapers)
JEL-codes: C31 G28 M14 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0275531925003381
Full text for ScienceDirect subscribers only

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:eee:riibaf:v:79:y:2025:i:c:s0275531925003381

DOI: 10.1016/j.ribaf.2025.103082

Access Statistics for this article

Research in International Business and Finance is currently edited by T. Lagoarde Segot

More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().