We used the latest database of Chinese industrial enterprises to make an empirical test of the relationship between the SO2 emissions trading pilot (ETP) policy implemented in 2007 and enterprise performance based on a difference-in-difference (DID) method since the ETP policy tends to be a “quasi-natural experiment.” The empirical results show that the ETP policy has a significant promotion effect on enterprise performance, which provides evidence supporting the “Porter hypothesis” in China. Heterogeneous regression results show that ETP policies play a vital role in promoting development in heavily polluting industries, state-owned enterprises, and central regions. The test results of the mechanism demonstrate that the ETP policy has two mechanisms to affect enterprise performance: “improving the total factor productivity of the enterprise” and “increasing the extra cost of the enterprise.” There are two policy implications of our research: first, government departments should strive to explore and implement relevant market-based environmental regulations and policies; second, government departments should vigorously support small and medium-sized enterprises and backward areas in the west while focusing on heavily polluting industries and making the best use of environmental regulations in pollution control, which are the key points for China to win the defense of the blue sky.
Bin, Sang; Xufei, Zhang; Lin, Guo; and Shujun, Sun
"The Impact of SO2 Emission Trading
Policy on Enterprise Performance,"
Contemporary Social Sciences:
3, Article 3.
Available at: https://css.researchcommons.org/journal/vol2022/iss3/3