Abstract
The promotion of innovation by the market transaction mechanism is affected by the perfection of the market system, the support of government policies, and companies’ operational strategies. However, few empirical studies explore this subject. In this context, we investigated how China’s carbon emission trading (CET) policy promotes companies’ total factor productivity (TFP) from the perspective of operational strategies, technological innovation, and market environment. Using the micro-data of listed companies from the Chinese stock “A” markets, we employed the difference-in-differences method to identify the CET policy’s effect on companies’ TFP. The benchmark regression results reveal that the policy has significantly boosted companies’ TFP. Furthermore, the mechanism analysis shows that companies could enhance their TFP by promoting technological innovation instead of operational strategies. Meanwhile, the government can facilitate this improvement effect by optimizing the market environment. Moreover, the heterogeneity analysis of market failure demonstrated that it would affect the performance of the CET mechanism. Additionally, the CET scheme’s effect on companies’ TFP is heterogeneous in terms of industry, ownership, and region. The results suggest that the Chinese government should continue to improve the market and institutional systems, increase R&D technology subsidies for innovation activities, and enhance the level of financial development.
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Notes
Hexun is a company that provides decision-making information for investment. It has established a professional index system to score the social responsibility of listed companies. The indicator system includes five first-level indicators: shareholder responsibility, employee responsibility, supplier, customer and consumer rights responsibility, environmental responsibility, and social responsibility. Each first-level indicator contains the corresponding second- and third-level indicators. Data source: http://stockdata.stock.hexun.com/zrbg/
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This research was supported by the Major Project of the Chinese National Social Science Fund “Research on improving the development mechanism of urban–rural integration” (21AZD036), the General Project of the Chinese National Social Science Fund “Land development right transaction, land resource allocation mechanism and high-quality economic development” (21FJYB052), and the National Natural Science Foundation of China (72073045).
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Tang, M., Cheng, S., Guo, W. et al. Relationship between carbon emission trading schemes and companies’ total factor productivity: evidence from listed companies in China. Environ Dev Sustain 25, 11735–11767 (2023). https://doi.org/10.1007/s10668-022-02552-8
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DOI: https://doi.org/10.1007/s10668-022-02552-8