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Impact of Carbon Prices on Corporate Value: The Case of China’s Thermal Listed Enterprises

Fang Zhang (), Hong Fang () and Xu Wang ()
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Fang Zhang: School of Economics & Management, Beihang University, Beijing 10191, China
Hong Fang: School of Economics & Management, Beihang University, Beijing 10191, China
Xu Wang: School of Economics & Management, Beihang University, Beijing 10191, China

Sustainability, 2018, vol. 10, issue 9, 1-14

Abstract: The emission trading scheme (ETS) has become a significant tool to solve the climate change problem. China has built domestic carbon trading pilots to control energy consumption and reduce emissions. This paper explores the linkage between the carbon market and covered corporate value in China. To address the relationship, this paper estimates the impact that the carbon prices of different pilots in China have on the value of thermal listed enterprises and the extent of this impact. By using weekly data from July 2014 to June 2017, we analyze the overall effect and perform a comparative study of influences of the three trading years. Moreover, we test if the effect of carbon trading pilots on electricity corporate value is market-specific. The results demonstrate that carbon prices have a significantly negative impact on stock value when looking at the full sample and the effects vary between markets.

Keywords: carbon price; corporate value; emission trading system; China (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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