The impact of carbon emission trading policy on green investment of listed companies

Li Danhe

doi:10.54097/3t4hz633

Authors

Li Danhe

DOI:

https://doi.org/10.54097/3t4hz633

Keywords:

carbon emission trading, green investment, double difference model, resource allocation, green innovation.

Abstract

In the context of global warming and China's' dual carbon 'goals, the carbon emission trading mechanism has become a crucial tool for reducing emissions. This study uses data from A-share listed companies between 2010 and 2023, employing a difference-in-differences model and an instrumental variable model to investigate the impact of carbon emission trading policies on green investment by listed companies. The findings indicate that these policies significantly enhance green investment by listed companies. Heterogeneity analysis reveals that the positive impact is more pronounced for state-owned enterprises and companies in eastern regions. The instrumental variable model confirms that the policies boost green investment by improving firms' total factor productivity and enhancing their level of green innovation. Based on these findings, the study recommends improving the carbon emission trading market and formulating differentiated green investment incentive policies to guide companies in optimizing resource allocation and strengthening green technology research and development, thereby promoting the sustainable development of a green and low-carbon economy.

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