Will the Carbon Emission Trading Scheme Improve Firm Value?
- SHEN Hongtao, HUANG Nan
- SHEN Hongtao, HUANG Nan (Jinan University, 510000)
With the quasi-natural experiment scenario of the carbon ETS in China, this paper provides empirical evidence of the impact of carbon ETS on firm value. Research finds that on the day the Notice on Launching the Carbon Emission Trading Pilot Scheme was released, the capital market responded positively, especially firms with low carbon intensity, showing that the carbon ETS can increase a firm's short-term value. However, with the DID methods, we find carbon ETS has no effect on the firm's long-term value and go on to explain the reasons: due to the loose control over carbon emission quota and the reduction of excessive production capacity, the carbon emission quota is in oversupply and low-priced, and as a result the carbon ETS fails to produce economic dividends for the time being. The paper reveals the microeconomic outcomes of the Coase Theorem from the perspective of carbon ETS and its findings have important implications for establishing a national unified carbon market in China.
JEL：D62, G30, M40
- Carbon Emission Trading Scheme, Firm Value, Quasi-natural Experiments