The impact of carbon emission trading on the financing constraints of high-emission enterprises: Evidence from China

Chaohua He and Wen Zhang

Finance Research Letters, 2024, vol. 67, issue PB

Abstract: Using Difference-in-Differences (DID) and Propensity Score Matching combined with Difference-in-Differences-in-Differences (PSM-DDD) methodologies, this paper examines the impact of China's carbon trading pilot policy on enterprise financing. We find that the high-emission enterprises in pilot regions are less financially constrained, especially for state-owned enterprises. The carbon trading policy may motivate high-emission enterprises to reduce carbon emissions through green technology innovation, thereby ameliorating their financing environment. Our findings suggest the economic significance of carbon emission trading in enterprise financing.

Keywords: Carbon emission trading; Carbon finance; Financing constraint; Corporate innovation (search for similar items in EconPapers)
JEL-codes: G30 Q55 Q56 Q58 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324009577

DOI: 10.1016/j.frl.2024.105927

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