 Do environmental regulations affect firm's cash holdings? Evidence from a quasi-natural experimentWeiping Li, Xiaoqi Chen, Jiashun Huang, Xu Gong and Wei Wu Energy Economics, 2022, vol. 112, issue C Abstract: Stricker environmental regulation enable firms to reduce their pollution and alter their investment decision, which may reshape their cash holding decisions. To investigate the relationship between environmental regulation, this study carries out the quasi-natural experiment based on the implementation of carbon dioxide emission trading system (CO2 ETS). Based on the Chinese listed firms from 2007 to 2020, we demonstrate that the CO2 ETS enable firms to hold more cash and the positive impact of CO2 ETS on cash holding is more pronounced for firms with stronger external monitoring and fewer investment opportunities, non-state-owned enterprises (non-SOEs), and firms located in less-marketization places. Our study enriches the economic consequence of environmental regulation and undercovers a new determinator for firm's cash holdings. Keywords: Triple difference-in-differences; Carbon emission trading scheme; Cash holdings; Environmental regulations (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:112:y:2022:i:c:s0140988322003061 DOI: 10.1016/j.eneco.2022.106151 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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