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    The impact of carbon emission trading policy on firms’ green innovation in China

    Yu, H. and Jiang, Y. and Zhang, Z. and Shang, W. and Han, Chunjia and Zhao, Y. (2022) The impact of carbon emission trading policy on firms’ green innovation in China. Financial Innovation 8 , p. 55. ISSN 2199-4730.

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    Abstract

    As an attribute of financial assets, carbon emission rights have an important impact on corporate innovation. This article takes the carbon emission regulation policy as the starting point to examine the impact of this shock on the green innovation of regulated companies and upstream and downstream affiliated companies. Based on China's listed company data and regional input-output tables, this paper uses differences-in-differences method and instrumental variable regression to analyze the diffusion of the green innovation effect of carbon emission trading policy. The results show that the policy has a direct green innovation promotion effect on regulated companies, and the effect spreads to the downstream of regulated industries through input-output linkages. However, the policy reduces the green innovation of upstream industries. The reason is that China's carbon finance innovation is relatively low, and the price mechanism that carbon emissions trading affects innovation is more subject to non-market shocks. Further, we find that the green innovation effect of the policy is more significant in state-owned enterprises, enterprises in the eastern region, and enterprises with low financing constraints. Therefore, it is necessary to introduce a variety of derivatives to mobilize market enthusiasm to reduce speculative fluctuations in carbon prices, establish relevant supporting policy to encourage enterprise innovation to reduce the crowding-out effect caused by emission reduction and reduce non-market factors.

    Metadata

    Item Type: Article
    School: School of Business, Economics & Informatics > Management
    Research Centres and Institutes: Innovation Management Research, Birkbeck Centre for
    Depositing User: Chunjia Han
    Date Deposited: 15 Jun 2022 04:20
    Last Modified: 16 Jun 2022 14:32
    URI: https://eprints.bbk.ac.uk/id/eprint/48446

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