Journal
NATURAL HAZARDS
Volume 95, Issue 1-2, Pages 91-111Publisher
SPRINGER
DOI: 10.1007/s11069-018-3434-5
Keywords
Carbon emissions trading; Financial performance; Difference-in-differences model; China
Funding
- National Natural Science Foundation of China [71273028, 71322103, 71774051]
- National Program for Support of Top-notch Young Professionals [W02070325]
- Changjiang Scholars Program of the Ministry of Education of China [Q2016154]
- Hunan Youth Talent Program
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Whether China's carbon emissions trading (CET) has an impact on the financial performance of the market players of carbon trading, i.e., firms, is crucial to the sustainable development of national economy and carbon trading market. Based on the panel data of the listed firms in the seven high energy-consuming industries in China during 2010-2017, this paper uses the DID model to study the impact of CET on the firms' financial performance. The empirical results show that the impact of CET on firms' financial performance presents obvious industrial heterogeneity; CET policy reduces the financial performance of firms in the nonferrous metal industry but improves that in the power industry. In addition, with the implementation of CET policy, its impact on the financial performance of firms in the nonferrous metal and power industries is increasingly intensifying. Finally, there is a lag of 2-4 years on the impact of CET on the firms' financial performance in the chemical, paper and aviation industries, and the effects change from negative to positive over time. That is, CET policy can hardly ensure that all firms are profitable in the short term, but there is still the possibility of profitability in the long term.
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