Is there a green path to economic growth: a study on China’s low-carbon city initiative

Xianghui Wang and Cong Wang

Applied Economics Letters, 2025, vol. 32, issue 7, 930-935

Abstract: As global warming perennially captures the collective attention of governments worldwide, we employ a multi-period difference-in-differences regression model to understand whether China’s Low-Carbon City (LCC) Initiative could promote corporate financial performance. Our results manifest that LCC exerts a constructive impact on enterprises. While state-owned firms and those within traditional sectors exhibit a more conspicuous augmentation in their roa, enterprises in less developed regions confront more substantial challenges in meeting the stringent requirements. We suggest the government, as it continues to advocate for policies aimed at reducing carbon emissions, should conduct experiments and demonstrations tailored to the specific characteristics of each region, adopting more nuanced approaches. Our results proffer practical policy insights for decision-makers and the corporate sphere, aiding in a deeper comprehension and response to the paramount issue of carbon emissions.

Date: 2025
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DOI: 10.1080/13504851.2023.2294011

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